Please help me with correct answer thanku Pender Corp. paid $320,000 for a 30% interest in Saltspring Limited on January 1, Year 6. During Year 6, Saltspring paid dividends of$116,000 and reported profit as follows:Profit before discontinued operationsDiscontinued operations loss (net of tax)ProfitPender's profit for Year 6 is calculated on $1,044,000 in sales, expenses of $116,000, income tax expense of $371,200, and itsinvestment income from Saltspring. Both companies have an income tax rate of 40%.Required:(a) Assume that Pender reports its investment using the equity method.(i) Prepare all journal entries necessary to account for Pender's investment for Year 6. (If no entry is required for a transaction/event,select "No journal entry required" in the first account field.)NoABCTransaction010203$369,000(34,800)$334,200Investment in SaltspringCashCash> Answer is complete but not entirely correct.General JournalInvestment in SaltspringInvestment in SaltspringEquity method loss-discontinued operationsDividend incomeDebit320,00034,800100,26010,440Credit320,00034,800110,700 (ii) Determine the correct balance in Pender's investment account at December 31, Year 6. (Omit $ sign in your response.)Balance in Pender's investment account$ 305000(iii) Prepare an income statement for Pender for Year 6. (Negative amounts and deductibles should be indicated by a minus sign.Omit $ sign in your response.)SalesPender CorpIncome statementYear ended December 31, Year 6Operating expensesIncome before income taxIncome tax expenseProfit$ 1044000110700115470011600010387003712000$ 4750700> ****

Journal entries refers to the entries which are made at the end of the period or year and it records…

Pender Corp. paid $320,000 for a 30% interest in Saltspring Limited on January 1, Year 6. During Year 6, Saltspring paid dividends $116,000 and reported profit as follows: Profit before discontinued operations Discontinued operations loss (net of tax) Profit $369,000 (34,800) $334,200 Pender's profit for Year 6 is calculated on $1,044,000 in sales, expenses of $116,000, income tax expense of $371,200, and its investment income from Saltspring. Both companies have an income tax rate of 40%. Required: (a) Assume that Pender reports its investment using the equity method.

Pender Corp. paid $320,000 for a 30% interest in Saltspring Limited on January 1, Year 6. During Year 6, Saltspring paid dividends $116,000 and reported profit as follows: Profit before discontinued operations Discontinued operations loss (net of tax) Profit $369,000 (34,800) $334,200 Pender's profit for Year 6 is calculated on $1,044,000 in sales, expenses of $116,000, income tax expense of $371,200, and its investment income from Saltspring. Both companies have an income tax rate of 40%. Required: (a) Assume that Pender reports its investment using the equity method.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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