Required information[The following information applies to the questions displayed below.]On January 2, Year 1, Company A bought 5% of Company B's capital stock for $99 million. Company B's net income for theyear ended December 31, Year 1, was $129 million. The fair value of the shares held by Company A was $116 million atDecember 31, Year 1. During Year 1, Company B declared a dividend of $50 million.2. Assume that Company A sold the stock on January 2, Year 2 for $128 million. Prepare the journal entries Company A would use torecord the sale.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answersin millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).1Answer is not complete.NoTransaction1General JournalDebitCreditFair value adjustment12.0Gain on investment (unrealized, NI)22CashInvestment in equity securitiesLoss on investment (NI)Fair value adjustment12.0128.099.0

Journal EntryThe fair value adjustment ensures the investment is reported at its market value on the…

Answered: Required information [The following…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter19: Corporations: Distributions Not In Complete Liquidation

Section: Chapter Questions

Problem 1BCRQ

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Silva Company is authorized to issue 5,000,000 shares of $2 par value common stock. In its IPO, the company has the following transaction: Mar. 1, issued 500,000 shares of stock at $15.75 per share for cash to investors. Journalize this transaction.
On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a 30% corporate income tax rate. During 2019, Kittson earned net income of 67,000, and the following events occurred: 1. Cash dividends of 3 per share on 4,000 shares of common stock were declared and paid. 2. A small stock dividend was declared and issued. The dividend consisted of 600 shares of 10 par common stock. On the date of declaration, the market price of the companys common stock was 36 per share. 3. The company recalled and retired 500 shares of 100 par preferred stock. The call price was 125 per share; the stock had originally been issued for 110 per share. 4. The company discovered that it had erroneously recorded depreciation expense of 45,000 in 2018 for both financial reporting and income tax reporting. The correct depreciation for 2018 should have been 20,000. This is considered a material error. Required: 1. Prepare journal entries to record Items 1 through 4. 2. Prepare Kittsons statement of retained earnings for the year ended December 31, 2019.
On July 1, X6, Influence Ltd. paid $100,000 to acquire 1,000 common voting shares of Associés Ltd., representing a 30% interest. Associé Ltée declares dividends of $1 per share on December 1, X6. The JV of Associate's shares as of December 31, X6, is $115. The profit generated by Associate during the last 6 months of X6 amounts to $240,000. Determine the gain or loss on the disposition of the shares by assuming that Influence Ltée sells 500 shares of Associé Ltée on December 31, X6 for an amount of $200 per share. Question 4 options: $14,000 $50,000 none of the above $14,500 $42,500
Required information [The following information applies to the questions displayed below.] Company T had 35,000 outstanding shares of common stock, par value $12 per share. On January 1 of the current year, Company P purchased some of Company T's shares as a long-term investment at $25 per share. At the end of the current year, Company T reported the following: income, $51,000, and cash dividends declared during the year, $22,500. The fair value of Company T stock at the end of the current year was $22 per share. Required: 1. For each of the following situations, identify the method of accounting that Company P should use. 4,200 shares purchased 10,500 shares purchased Accounting Method
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! Required information [The following information applies to the questions displayed below.] As a long-term investment, Fair Company purchased 20% of Midlin Company's 160,000 shares for $192,000 at the beginning of the reporting year of both companies. During the year, Midlin earned net income of $121,000 and distributed cash dividends of $0.20 per share. At year-end, the fair value of the shares is $200,000. 2. Assume significant influence was acquired. How will the investment in Midlin Company be reflected in the balance sheet and income statement of Fair Company at year-end? Balance Sheet (Partial) Income Statement (Partial)
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Required information [The following information applies to the questions displayed below.) Felicia Company acquired 22.000 of the 55,000 shares of outstanding common stock of Nueces Corporation as a long term investment. The annual accounting period for both companies ends December 31. The following transactions occurred during the year: Jan. 10 Purchased 22,000 shares of Nueces common stock at $14 per share. Dec. 31 Nueces Corporation reported net income of $104,000. Dec. 31 Nueces Corporation declared and paid a cash dividend of $0.70 per share. Dec. 31 Determined the fair value of Nueces stock to be $13 per share. 3. Show how the long-term investment and the related revenue should be reported on the financial statements of Felicia Company Balance Sheet FELICIA COMPANY Long-term Investments: Income Statement
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Clark Company acquired 15% of the 500,000 shares of common stock of Davis Company at a total cost of $25.75 per share on June 1, 2025. On October 1, Davis Company declared and paid a $50,000 cash dividend. On December 31, Davis Company stock had a market price of $27.00 per share and the company reported net income of $1,250,000 for the year. The securities are classified as trading. Prepare all journal entries for 2025. June 1 Oct 1 Dec 31 Use the information above: Assume Clark Company acquired 40% of the shares of Davis Company. June 1 Oct 1 Dec 31
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