Riverbed Inc. purchased 30% of Nadal Corporation's 33,200 outstanding common shares at a cost of $15 per share on January 3, 2024. The purchase price of $15 per share was based solely on the book value of Nadal's net assets. On September 21, Nadal declared and paid a cash dividend of $47,000. On December 31, Riverbed's year end, Nadal reported profit for the year of $101.000. Nadal shares had a fair value of $14.75 per share at December 31, 2024. (a) Under the assumption that the 30% holding of Nadal does not give Riverbed significant influence over Nadal, prepare all required 2024 journal entries, assuming the investment is accounted for using the FVTPL model. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when the amount is entered. Do not Indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.)

Riverbed Inc. purchased 30% of Nadal Corporation's 33,200 outstanding common shares at a cost of $15 per share on January 3, 2024. The purchase price of $15 per share was based solely on the book value of Nadal's net assets. On September 21, Nadal declared and paid a cash dividend of $47,000. On December 31, Riverbed's year end, Nadal reported profit for the year of $101.000. Nadal shares had a fair value of $14.75 per share at December 31, 2024. (a) Under the assumption that the 30% holding of Nadal does not give Riverbed significant influence over Nadal, prepare all required 2024 journal entries, assuming the investment is accounted for using the FVTPL model. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when the amount is entered. Do not Indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

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

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

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 14RE

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On January 1, 2020, Santos Ltd. purchased 30% of Yardley Co.’s 50,000 outstanding common shares at a price of $20 per share. This price is based on Yardley’s net assets. On June 30, Yardley declared and paid a cash dividend of $60,000. On December 31, 2020, Yardley reported net income of $120,000 for the year. At this time, the shares had a fair value of $23. Santos’s year-end is December 31. Required: a. Assuming that Santos does not have any significant influence over Yarder, prepare all the 2020 entries relating to this investment using the FVTPL classification. b. Prepare all the 2020 entries relating to this investment if it was classified as cost due to no active markets. c. Prepare all the 2020 entries relating to this investment assuming that Santos has significant influence over Yarder. Santos uses the equity method of accounting.
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Heidebrecht Design acquired 30% of the outstanding common stock of Oriole Company on January 1, 2020, by paying $684,000 for the 45,600 shares. Oriole declared and paid $0.60 per share cash dividends on March 15, June 15, September 15, and December 15, 2020. Oriole reported net income of $356,000 for the year. At December 31, 2020, the market price of Oriole common stock was $26 per share. Prepare the journal entries for Heidebrecht Design for 2020 assuming Heidebrecht Design cannot exercise significant influence over Oriole. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 1Mar. 15June 15Sept. 15Dec. 15Dec. 31…
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