Selk Steel Company, which began operations in Year 1, had the following transactions and events in its long-terminvestments.Year 1January 5 Selk purchased 60,000 shares (20% of total) of Kildaire's common stock for $1,560,000.October 23 Kildaire declared and paid a cash dividend of $3.20 per share.December 31 Kildaire's net income for the year is $1,164,000, and the fair value of its stock at December 31 is $30.00per share.Year 2October 15 Kildaire declared and paid a cash dividend of $2.60 per share.December 31 Kildaire's net income for the year is $1,476,000, and the fair value of its stock at December 31 is $32.00per share.Year 3January 2 Selk sold 3% (equal to 1,800 shares) of its investment in Kildaire for $54,200 cash. Required:Prepare journal entries to record these transactions and events for Selk. Assume that Selk has a significant influence over Kildaire withits 20% share of stock.Complete this question by entering your answers in the tabs below.Year 1Year 2Prepare journal entries to record these transactions and events for Selk.View transaction list1Journal entry worksheet2DateJanuary 05Year 33Selk purchased 60,000 shares (20% of total) of Kildaire's common stock for$1,560,000.Note: Enter debits before credits.General JournalDebitCredit>

For accounting purposes, journal entries are prepared to record the day-to-day transactions or…

Answered: Selk Steel Company, which began…

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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Jackson Company engaged in the following investment transactions during the current year. February 17 Purchased 430 shares of Medical Company common stock for $15 per share plus a brokerage commission of $150. Jackson does not have significant influence over Medical.April 1 Bought 23,000 of the 100,000 outstanding shares of Olde Company for $230,000. Goodwill of $73,000 was included in the price.June 25 Received a $1.30 per share dividend on Medical Company stock.June 30 Olde Company reported second-quarter profits of $13,000.October 1 Purchased 1,300 bonds of Alpha Company for $14 per bond plus a brokerage fee of $330. These bonds are classified as securities available-for-sale.December 31 Medical Company shares are selling for $20 and Alpha bonds are selling for $11.Prepare the appropriate journal entries to record the transactions for the year, including year-end adjustments. Note: If no entry is required for a transaction/event, write "No journal entry required"
Forte Inc. produces and sells theater set designs and costumes. The company began operations on January 1, Year 1. The following transactions relate to securities acquired by Forte Inc., which has a fiscal year ending on December 31: Record these transactions on page 10: Year 1 Jan. 22 Purchased 29,800 shares of Sankal Inc. as an available-for-sale security at $18 per share, including the brokerage commission. Mar. 8 Received a cash dividend of $0.20 per share on Sankal Inc. stock. Sep. 8 A cash dividend of $0.24 per share was received on the Sankal stock. Oct. 17 Sold 3,800 shares of Sankal Inc. stock at $16 per share less a brokerage commission of $75. Dec. 31 Sankal Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $25 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment. Record these transactions on page 11: Year 2 Jan. 10 Purchased an…
Berk Company engaged in the following investment transactions during the current year. April 1 July 1 Bought 40,000 of the 100,000 outstanding shares of Apex Company for $400,000. During the year, Apex Company reported net income of $30,000, and paid dividend of $10,000. Bought a $270 million bond with 8% interest rate. The market interest rate was 6% for bonds of similar risk and maturity. Berk paid $310 million for the bonds. The company will receive interest semiannually on June 30 and December 31. The fair value of the bonds at December 31 was $240 million. Dec 31 Required: 1. Beck has significance influence over Apex's management. On December 31, how much would Berk report as the value of its investment in Apex on the balance sheet? 2. Berk intends to actively trade the bond investment. a. Prepare the journal entries related to the bond on July 1 and on December 31. b. On December 31, how much would Berk report as the value of the bond on The balance sheet Please avoid…
At a total cost of $1,008,000, Herrera Corporation acquired 80,000 shares of Tran Corp. common stock as a long-term investment. Herrera Corporation uses the equity method of accounting for this investment. Tran Corp. has 200,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation. a. Journalize the entries by Herrera Corporation to record the following information:
24 At the beginning of the year, Fairbridge, Inc. purchased an investment in Miller Milling Mills for $500,000, representing 10% of the book value of Miller. During the year, Miller reported net income of $800,000 and pays cash dividends of $92,000. At the end of the year, the fair value of Fairbridge’s investment is $525,000. Required At what amount is the investment reported on Fairbridge’s balance sheet at year-end? What amount of income from investments does Fairbridge report? Prepare journal entries to record the transactions for Fairbridge Company.
Cayuga Meadows purchased 42,000 shares of common stock of Long Corporation as a long-term investment for $1,000,000. During the year, Long Corporation reported net income of $500,000 Paid dividends of $200,000. Instructions: Assuming this purchase represents a 25% interest, prepare all the journal entries required for the year.
Tarrant Corporation was organized this year to operate a financial consulting business. The charter authorized the following stock: common stock, $18 par value, 12,700 shares authorized. During the year, the following selected transactions were completed: a. Sold 6,300 shares of common stock for cash at $36 per share. b. Sold 2,300 shares of common stock for cash at $41 per share. c. At year-end, the company reported net income of $7,200. No dividends were declared. E11-5 Part 2 2. Prepare the stockholders' equity section of the balance sheet at the end of the year. Note: Amounts to be deducted should be indicated by a minus sign. Stockholders' equity Contributed capital: TARRANT CORPORATION Balance Sheet (Partial) At December 31, This year Total contributed capital Total stockholders' equity $ 0 0
The following equity investment transactions were completed by Vintage Company during a recent year: Apr. 10 Purchased 4,400 shares of Delew Company’s common stock for a price of $50 per share plus a brokerage commission of $115. Delew Company has 220,000 shares of common stock outstanding. July 8 Received a quarterly dividend of $0.65 per share on the Delew Company investment. Sept. 10 Sold 1,200 shares for a price of $41 per share less a brokerage commission of $90. Dec. 31 At the end of the accounting period, the fair value of the remaining 3,200 shares of Delew Company’s stock was $49.53 per share.
The following equity investment transactions were completed by Vintage Company during a recent year: Apr. 10 Purchased 4,000 shares of Delew Company’s common stock for a price of $52 per share plus a brokerage commission of $105. Delew Company has 240,000 shares of common stock outstanding. July 8 Received a quarterly dividend of $0.50 per share on the Delew Company investment. Sept. 10 Sold 1,200 shares for a price of $42 per share less a brokerage commission of $90. Dec. 31 At the end of the accounting period, the fair value of the remaining 2,800 shares of Delew Company’s stock was $51.53 per share. Required: Journalize the entries for these transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.…
An investor purchased 100 shares of Mallard common stock at $20 per share on March 15 of Year 1. On December 31 of Year 1, the stock was quoted at $19 per share and Mallard declared and paid a dividend of $1.50 per share. On June 5 of Year 2, the investor sold all 100 shares for $22 per share. On December 31 of each year, the Fair Value Adjustment account is adjusted. Assuming the investment is measured at FV-NI, provide the journal entries to be made at each of the following dates. a. March 15, Year 1. b. December 31, Year 1. c. June 5, Year 2. d. December 31, Year 2. Note: If a journal entry isn't required for the transaction, select "N/A—Debit" and "N/A―Credit" as the account names and leave the Dr. and Cr. answers blank (zero). Date Account Name (a) Mar. 15, Year 1 Investment in Stock Cash (b1) Dec. 31, Year 1 (b2) Dec. 31, Year 1 (c) June 5, Year 2 To record investment purchase. Cash Dividend Revenue To record dividends. Unrealized Gain or Loss-Income Fair Value Adjustment-Equity…
Glacier Products Inc. is a wholesaler of rock climbing gear. The company began operations on January 1, 20Y3. The following transactions relate to securities acquired by Glacier Products Inc., which has a fiscal year ending on December 31, 20Y3: 20Y3 Jan. 25 Purchased 66,500 shares of Helsi Co. common stock for $640,000. There are 190,000 shares of Helsi Co. stock outstanding. Dec. 31 Received $19,000 of cash dividends on Helsi Co. stock. Helsi Co. reported net income of $78,000 in 20Y3. Required: 1. Journalize the entries to record the preceding transactions. If an amount box does not require an entry, leave it blank. Date Description Debit Credit 20Y3 Jan. 25 fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 Dec. 31-Dividends fill in the blank 8 fill in the blank 9 fill in the blank 11 fill in the blank 12 Dec. 31-Income fill in the blank 14 fill in the blank 15 fill in the blank…
As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Incorporated's 430,000 shares for $510,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC's net assets were equal. During the year, AMC earned net income of $280,000 and distributed cash dividends of 15 cents per share. At year-end, the fair value of the shares is $538,000. Required: 1. Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 2 3 4 Record the purchase of AMC Supplies shares for $510,000 as a long-term investment. Note: Enter debits before credits. Transactions General Journal Debit Credit

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