Pierson Corporation owned 10,000 shares of Hunter Corporation. These shares were purchasedin 2011 for $90,000. On November 15, 2015, Pierson declared a property dividend of one shareof Hunter for every ten shares of Pierson held by a stockholder. On that date, when the marketprice of Hunter was $28 per share, there were 90,000 shares of Pierson outstanding. What gainand net reduction in retained earnings would result from this property dividend?Gain =SWERNet reduction in R/E=90,000+ 10x128= 9000 x 28 = 252of $10 par value common stock outstandthe market price of the stA

Retained earnings represent the portion of a company's net income that has not been distributed to…

Answered: Pierson Corporation owned 10,000 shares…

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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On January 1, 2015, Fisher Corporation paid $2,290,000 for 35 percent of the outstanding voting stock of Steel, Inc., and appropriately applies the equity method for its investment.Any excess of cost over Steel’s book value was attributed to goodwill. During 2015, Steel reports $720,000 in net income and a $100,000 other comprehensive income loss. Steel also declares and pays $20,000 in dividends. What amount should Fisher report as its Investment in Steel on its December 31, 2015, balance sheet? What amount should Fisher report as Equity in Earnings of Steel on its 2015 income statement?
During 2021, Tom Sanchez purchased 200 shares of common stock issued by Tri State Manufacturing for $3400 including commission. Later in the same year, Tom sold the shares for $3800 after commission. Calculate the following. (Round all answers to two decimal places.) 1. Profit on this stock transaction: Parentheses 2. Percentage return on investment: % %4
On January 1, 2017, Vancouver Corporation paid $400,000 to purchase 40% of the outstanding voting stock of Montreal Corporation. The equity method is used to account for the investment. The following data relate to this investment.2017∙ Dividends received from Montreal Corporation amounted to $20,000.∙ Net income reported by Montreal Corporation was $200,000.∙ Current market value of Montreal Corporation investment on December 31, 2017, was $700,000.2018∙ Dividends received from Montreal Corporation amounted to $30,000.∙ Net income reported by Montreal Corporation was $300,000.∙ Current market value of English Court Corporation investment on December 31, 2018, was $860,000.∙ The investment was sold on December 31, 2017, for $830,000.Prepare all journal entries for 2017 and 2018 relating to Vancouver Corporation's investment in Montreal Corporation.
Griggs Company bought 30% of Jackson Corporation in 2020. During 2020, Jackson reported net income in the amount of P400,000 and declared and paid dividends in the amount of P50,000. Griggs mistakenly accounted for the investment using the cost method instead of the equity method. What effect would this error have on the investment account and net income, respectively, for 2020? Choices: Overstated by P105,000; understated by P105,000. Understated by P105,000; understated by P105,000. Understated by P120,000; overstated by P105,000. Overstated by P120,000; overstated by P120.000.
10 On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in Associate account be debited/credited in 2018? Group of answer choices No entry P40,000 Dr. P1,035,000 Cr. P1,060,000 Cr.
In 2020, ABC Inc., a domestic corporation sold shares of stocks for P250,000. The shares was acquired in 2015 at a cost of P100,000, were held as a capital asset and were sold directly to a buyer. How much was the capital gains tax due? A.P 10,000B.P 15,000C.P 22,500D.P 45,000
Genny, Inc. received $80,000 in dividends during 2007 from its stock investment in Cary Company. How much of the dividends are excluded from Genny's taxable income? Select one: a. $56,000 b. $24,000 C. $80,000 d. None
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In January 2018, Janeway Inc. doubled the amount of itsoutstanding stock by selling on the market an additional10,000 shares to finance an expansion of the business. Youpropose that this information be shown by a footnote on thebalance sheet as of December 31, 2017. The president objects,claiming that this sale took place after December 31, 2017,and therefore should not be shown. Explain your position.
On January 1, 2011, Goodwill Corporation purchased 25% of the outstanding voting shares of Short Supplies common stock for $210,000 cash. On that date, Short's book value and fair value were both $840,000. The equity method is deemed appropriate for this investment. Short's net income reported on December 31, 2011, was $80,000. During 2011, Short also paid cash dividends in the amount of $24,000. Required: Compute the amount that would be reported for the investment on Goodwill Corporation's financial statements at December 31, 2011.
1. In 2018, Brown, Inc., issued $1 par common stock for $28 per share. No other common stock transactions occurred until August 31, 2020, when Brown repurchased some of its issued shares on the open market $23 per share. Brown retired the shares at the time of repurchase. Which of the following correctly describes the effect of the share repurchase and retirement? Group of answer choices a. Additional paid-in capital is decreased. b. Retained earnings is increased. c. 2020 net income is decreased. d. 2020 net income is increased.
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