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…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 25E

See similar textbooks

Similar questions

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.
Please show the proper solution in a good accounting form.
. Min Hyun Jing Ltd. purchased 21,600 common shares of Glastone Ltd. on January 1, 2018, when the market price was $27.50 per share. This gave Min Hyun Jing 12% of the shares issued by Glastone Ltd. Min Hyun Jing Ltd. has a December 31 year end. For the year ended December 31, 2018, Glastone reported net income of $260,000 and declared dividends of $1.10 per share on December 31. The trading price of Glastone’s shares on that date was $31.20. For the year ended December 31, 2019. Glastone reported net income of $280,000 and declared dividends of $1.15 per share on December 31. The trading price of Glastone’s shares on December 31 was 34.60. Min Hyun Jing Ltd. purchased an additional 20,000 common shares on this date. For the year ended December 31, 2020, Glastone reported a net loss of $80,000, but still declared dividends on December 31, in the amount of $0.75 per share. The trading price of Glastone’s shares on December 31, 2019 was $30.50 per share. For the year ended…
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
please help me
! 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)
RBG Corp purchased 150 shares of MLK stock during the year for a total of $23,250. RBG Corp owns 18% of the outstanding stock of MLK. RBG Corp plans to use the stock for trading purposes and will not hold onto these shares for very long. On December 31, 20X1, each share was worth $157 (i.e. market value). а. Record the appropriate journal entry on December 31, 20X1. b. Where on the financial statements are these values recorded?
On January 25, 2023, Martin Ltd. purchased 5,000 common shares of NBC (National Bank of Canada) for $30 each. During the remainder of 2023, Martin received $1.60/share in dividends and NBC's earnings per share were $4.50. The closing price of the shares on the fiscal year-end date of December 31, 2023, was $31. Required Assume that Martin classified the investment as FVPL. a. At what value should the company report the NBC shares on its December 31, 2023, balance sheet? b. How much income should the company report in relation to these shares? c. How much other comprehensive income (OCI) should Martin report in relation to these shares? Requirement a. Assume that Martin classified the investment as FVPL. At what value should the company report the NBC shares on its December 31, 2023, balance sheet? The company should report the NBC shares at per share for a total of $ at December 31, 2023. Requirement b. Assume that Martin classified the investment as FVPL. How much income should the co
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
LLA, Inc, was capitalized through the issuance of 10,000 shares of $30 par common stock that was sold at $50 per share. LLA had net income as follows: Year 1 $100,000 Year 2 200,000 If, during Year 2, LLA paid dividends to its shareholders at $25 per share, what armount was LLA's retained earnings balance and shareholders' equity balance at the end of Year 27 Retained earnings Shareholders' equity $50,000 $550,000 B. $50,000 $800,000 $300,000 $550,000 $300,000 $800,000 D.

SEE MORE QUESTIONS

Recommended textbooks for you

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

SWFT Comprehensive Vol 2020

Accounting

ISBN:

9780357391723

Author:

Maloney

Publisher:

Cengage

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

SWFT Comprehensive Vol 2020

Accounting

ISBN:

9780357391723

Author:

Maloney

Publisher:

Cengage

SWFT Essntl Tax Individ/Bus Entities 2020

Accounting

ISBN:

9780357391266

Author:

Nellen

Publisher:

Cengage

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

SEE MORE TEXTBOOKS