Question:On January 1, 2011, AndersonCompany purchased 40% of thevoting common stock of BarneyCompany for $2,000,000, whichapproximated book value. During2011, Barney paid dividends of$30,000 and reported a net loss of$70,000. What amount of equityincome would Anderson recognizein 2011 from its ownership interestin Barney?

Steps to Calculate Equity Income: 1:Determine Anderson's share of Barney's net loss: Anderson owns…

Answered: Question: On January 1, 2011, Anderson…

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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Sew Corporation's stockholders' equity at December 31, 2011 was $4,000,000 in total On January 3, 2012, Sew sells 10,000 shares of previously unissued $100 par common stock to Pan Corporation for $1,400,000. On this date the recorded book values of Sew's assets and liabilities equal their fair values. Goodwill from Pan's investment is Sew at the date of purchase is: $0 $300,000 $50,000 $400,000
es On March 31, 2024, Chow Brothers, Incorporated, bought 6% of KT Manufacturing's capital stock for $54.8 million. KT's net income for the year ended December 31, 2024, was $81.6 million. The fair value of the shares held by Chow was $38.2 million at December 31, 2024. KT did not declare or pay a dividend during 2024. Required: 1. Prepare all appropriate journal entries related to the investment during 2024. 2. Assume that Chow sold the stock on January 20, 2025, for $31.6 million. Prepare the journal entries to record the sale. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare all appropriate journal entries related to the investment during 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5), View transaction list Journal entry worksheet 1 2 3 Record the entry for…
CFR, Inc. purchased a 10% interest in The Candy Company on January 2, 2013. The purchase price was $400,000. CFR's officers constitute a majority of The Candy Company's board of directors. The investee reported net income of $500,000 and paid dividends of $150,000 in 2013. On the December 31, 2013, balance sheet, what amount should CFR report as Equity Investment in The Candy Company? a. $900,000 b. $870,000 c. $800,000 d. $830,000 The answer is B, but I don't understand why
Question: Simmons Corporation owns stock of Armstrong, Inc. Prior to 2014, the investment was accounted for using the equity method. In early 2014, Simmons sold part of its investment in Armstrong, and began using the fair value method. In 2014, Armstrong earned net income of $80,000 and paid dividends of $95,000. Prepare Simmons's entries related to Armstrong's net income and dividends, assuming Simmons now owns 10% of Armstrong's stock.
On January 1, 2020, Apple Inc. purchased 15% of the voting shares of Pears Inc. for $87,000. Apple Inc. does not have significant influence over Pears Inc. Apple’s net income and declared dividends for the following three years are as follows Net Income Dividends 2019 $10,000 $70,000 2018 $70,000 $80,000 2017 $50,000 $20,000 1. What is the journal entry to record Apple's share of Pear's dividends for 2017 2. What is the journal entry to record Apple's share of Pear's net income for 2017 (if any)?
On January 1, 2022, Mojito Corporation purchased 20% (20,000 shares) of the outstanding stock of Dulcinea Corporation for $153,000. During 2022, Dulcinea Corporation paid total dividends of $45,000 and earned $80,000 in net income. At the end of 2022, Dulcinea Corporation’s stock had a fair market value of $155,000. Required: Prepare the journal entries that Mojito would make during 2022 assuming that they do NOT have significant influence over Dulcinea as a result of their stock ownership (i.e. fair value method). Prepare the journal entries that Mojito would make during 2022 assuming that they do have significant influence over Dulcinea as a result of their stock ownership (i.e. equity method).
Pine Company makes an investment in Holt Company. Journalize the following transactions assuming that Pine Company uses (a) the fair value method and (b) the equity method for its investment in Holt Company: 1) On Jan. 1, 2017, Pine bought 30% of Holt's common stock. Total book value of all Holt's common stock was $800,000 on this date. 2) During 2017, Holt reported $40,000 of net income. 3) During 2017, Holt paid $20,000 of dividends
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