### Scenario DescriptionRobbins owns 40% of Smith and has a balance in its Investment Account of $200,000. On January 1, 2020, Robbins purchases an additional 20% of Smith for $150,000 cash.### QuestionIn addition to the entry Dr. Investment $150,000 and Cr. Cash $150,000, what additional journal entry by Robbins is required? (Hint: revalue the original 40% ownership interest of Robbins).### Options1. **Dr. Investment $40,000** Cr. Gain on Revaluation of Investment $40,0002. **Dr. Investment $40,000** Cr. Additional Paid in Capital $40,0003. **Dr. Investment $100,000** Cr. Additional Paid in Capital $100,0004. **Dr. Investment $100,000** Cr. Gain on Revaluation of Investment $100,000### InstructionsMoving to the next question prevents changes to this answer.### Note on Visual ElementsThere are no graphs or diagrams present in this content. It consists of a multiple-choice accounting problem displayed on a screen with a visible section of a laptop keyboard.

Journal entry is the primary step to record the transaction in the books of accounts. Investment is…

Robbins owns 40% of Smith and has a balance in its Investment Account of $200,000. On January 1, 2020 Robbins purchases an additional 20% of Smith for $150,000 cash. In addition to the entry, Dr. Investment 150,000 and Cr. Cash 150,000 what additional journal entry by Robbins is required. (hint: revalue the original 40% ownership interest of Robbins). O Dr. Investment $40,000. Cr. Gain on Revaluation of Investment $40,000 O Dr. Investment $40,000. Cr. Additional Paid in Capital. $40,000 Dr. Investment $100,000. Cr. Additional Paid in Capital $100,000 Dr. Investment $100,000 Cr. Gain on Revaluation of Investment. $100,000

Robbins owns 40% of Smith and has a balance in its Investment Account of $200,000. On January 1, 2020 Robbins purchases an additional 20% of Smith for $150,000 cash. In addition to the entry, Dr. Investment 150,000 and Cr. Cash 150,000 what additional journal entry by Robbins is required. (hint: revalue the original 40% ownership interest of Robbins). O Dr. Investment $40,000. Cr. Gain on Revaluation of Investment $40,000 O Dr. Investment $40,000. Cr. Additional Paid in Capital. $40,000 Dr. Investment $100,000. Cr. Additional Paid in Capital $100,000 Dr. Investment $100,000 Cr. Gain on Revaluation of Investment. $100,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Large Ltd owns 100% of the shares of Small Ltd. These shares were acquired on 1 July 2019 for $1…

A: Analysis of Profits of Small Ltd. Particulars Amount Balance of Retained Earnings 400000…

Q: Matthew Incorporated, owns 30 percent of the outstanding stock of Lindman Company and has the…

A: Inventory includes all the items, merchandise, and raw materials that are used by the business…

Q: On July 1, 2019, Killearn Company acquired 124,000 of the outstanding shares of Shaun Company for…

Q: Regency owns 5% of Marriott. On October 1, 2020 Regency acquires an additional 25% of Marriott…

A: Income: Income means return on the invested capital.

Q: An investor purchases a 30% interest in an investee company, and the investor concludes that it can…

A: Answer:- Journal entry meaning:- A company first logs all of its transactions in a journal. The act…

Q: On January 1, 2020, Abbey acquires 90 percent of Benjamin's outstanding shares. Financial…

A: Consolidation is an activity in which financial statements of a parent and its subsidiary should be…

Q: Company P purchase an 80% interest in Company S on January 1, 2015, for $480,000. Company S had…

A: Particulars company fair value Parent company price (80%) Non- controlling interests(20%)…

Q: February 20, 2020: Lee Ranger purchased 100 shares of Pine Corp. stock for $30 a share. April 7,…

A: Basis of share purchased means the price paid for purchasing the share including the purchase price…

Q: Sarnia Inc. acquired 15% of the 100,000 outstanding common shares of London Ltd. on January 1, 2018,…

A: Given: Pat Inc.(P) acquired 15% of the 100,000 outstanding common shares of Mark Inc Cash…

Q: On January 2, 2019, Xiao Company purchased an equipment estimated useful life of 5 years. On January…

A: The Controlling Interest means the share of Parent Company in Subsidiary's Asset/Income. Such…

Q: Company P purchases an 80% interest in Company S on January 1, 2015, for $480,000. Company S had…

Q: Large Ltd owns 100% of the shares of Small Ltd. These shares were acquired on 1 July 2019 for $1…

A: The question is related to Consolidated Financial Statements. Small Ltd is wholly owned Subsidiary…

Q: How much is the noncontrolling interest share of Small’s net income for 2020 ?

A: Net Income or net earnings is the excess of total revenues over total expenses. (as defined) Net…

Q: 1. Cooper owns 45% of Dermot and has an investment account with a balance of $1,000,000. Assume…

A: Investment refers to the amount invested in financial asset that may generate profit from them, The…

Q: On July 1, 2019, Killearn Company acquired 105,000 of the outstanding shares of Shaun Company for…

A: When a corporation acquires another corporation, the accounting treatment of the invested capital or…

Q: XYZ Ltd acquires 100 per cent of Red-X Ltd on 1 July 2021. XYZ Ltd pays the shareholders of Red-X…

A: Goodwill is defined as the portion of the purchase price that is greater than the sum of the net…

Q: Top owns 80% of Bottom On January 1, 2018 Bottom sell Land (cost of $60,000) to Top for $100,000.…

A: Gain on sales = Sales value - book value = $100,000 - $60,000 = $40,000

Q: Franklin purchases 40 percent of Johnson Company on January 1 for $568,700. Although Franklin did…

A: The company investing in another company can use the equity method to account for the investment.…

Q: Big owns 60% of Little and at December 31, 2012, its Investment in Little account stands at…

A: Journal entry refers to posting of the transaction of the business into the books and it is the…

Q: equity method to account for this investment

A: Since Jupiter Inc. acquired 25% in Saturn Co., the debit balance in the investment will include the…

Q: Wildhorse Company owns 4800 of the 12000 outstanding shares of Blossom Corporation common stock.…

A: Investing is the act or manner of devoting money, time or other resources to a good, endeavor, or…

Question

### Scenario Description

Robbins owns 40% of Smith and has a balance in its Investment Account of $200,000. On January 1, 2020, Robbins purchases an additional 20% of Smith for $150,000 cash.

### Question

In addition to the entry Dr. Investment $150,000 and Cr. Cash $150,000, what additional journal entry by Robbins is required? (Hint: revalue the original 40% ownership interest of Robbins).

### Options

1. **Dr. Investment $40,000**
Cr. Gain on Revaluation of Investment $40,000

2. **Dr. Investment $40,000**
Cr. Additional Paid in Capital $40,000

3. **Dr. Investment $100,000**
Cr. Additional Paid in Capital $100,000

4. **Dr. Investment $100,000**
Cr. Gain on Revaluation of Investment $100,000

### Instructions

Moving to the next question prevents changes to this answer.

### Note on Visual Elements

There are no graphs or diagrams present in this content. It consists of a multiple-choice accounting problem displayed on a screen with a visible section of a laptop keyboard.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Introduction:

VIEW

Answer:

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Chaney acquires 100% of the voting shares of Roberts on January 1, 2010 in a transaction structured as an acquisiton. Assume that using the acquisiton method, goodwill of $2,000,000 resulted. in addition to the initial payment to Roberts shareholders, Chaney agrees that if in 2 years, Roberts earnigs increase by 40%, Chaney will pay an additional $500,000 to Roberts shareholders. At the date of acquisiton, the probability of meeting this earnings target is viewed as 70%. a, prepare the journal entry to be recorded by Chaney on January 1, 2010 (you may ignore the time value of money) b, Assume that at the end of 2012, Roberts earnings have increased by 50%. what entry is recorded by Chaney at that tiem. c, Assume that at the end of 2012, Roberts earnings have increased by 30%. what entry is recorded by Chaney at that time.
vnt.2
Please help me. Thankyou.
Delaney Company sells, for $280,000, a 40% of the shares it owns in Hunter Company. The carrying value of the Equity Investment relating to these shares is $240,000 on the date of sale. The journal entry to record the sale assuming Delaney keeps control over Hunter includes: Select one: A. Equity investment, debit, $240,000 B. Gain, credit, $40,000 C. APIC, credit, $40,000 D. Equity investment, credit, $280,000
Adams owns 80% of Williams and has a carrying value of the investment at January 1, 2020, of $600,000. On that date, Adams sells 20% of its investment for $150,000 reducing its ownership to 60%. What journal entry is recorded by Williams at that date
Watkins, Inc. acquires all of the outstanding stock of Glen Corporation on January 1, 2020. At that date, Glen owns only three assets and has no liabilities: Book Fair Value Value $40,000 $50,000 80,000 75,000 Equipment (10-year life) Building (20-year life) 200,000 300,000 Land If Watkins pays $450,000 in cash for Glen, what acquisition-date fair value allocation, net of amortization, should be attributed to the subsidiary's Equipment in consolidation at December 31, 2022?
My question is on the image thanks.
please print the journal entries
Choco, Inc. acquires 15% of Cake Corporation on January 1, 2020, for $130,000 when the book value of Cake’s net assets was $760,000. During 2020 Cake reported net income of $150,000 and paid dividends of $32,000. Cake has a land that are undervalued by $30,000 in January 1, 2020. On January 1, 2021, Choco purchased an additional 30% of Cake for $280,000, giving Choco the ability to significantly influence the operating policies of Cake. During 2021, Cake reported net income of $180,000 and paid dividends of $32,000. Cake’s land was undervalued by $32,000 in January 1, 2021. Any excess of cost over book value is attributable to Trademark which has a useful life of 8 years in January 1, 2020. During 2020 and 2021, there was no fair value adjustment for Cake (there was no changes in fair value). And during 2020 and 2021, there was no changes in net assets. 5) In 2021, using the equity method, what is the balance of the investment account in Cake at December 31, 2020? Show your…
Apenhuizen acquires 20 percent of the outstanding voting shares of Bergweide on January 1, 2019, for € 210,000 and applies the equity method in accounting for this investment. Bergweide has a book value of € 900,000 at January 1, 2019, and records net income of € 210,000 during 2019 and € 230,000 in 2020. Bergweide declared and paid dividends of € 100,000 in each of these years. On the acquisition date the book values of Bergweide’s asset and liability accounts are considered as equal to fair values except for a copyright whose value accounted for Apenhuizen’s excess cost in the acquisition. The copyright had a remaining life of 15 years at January 1, 2019. If Apenhuizen sells its entire investment in Bergweide on January 1, 2021, for € 300,000 cash, what is the impact on Apenhuizen’s income?