SRK Services acquired 30% of the outstanding common stock of KRK Company on January 1, 2010, by paying $800,000 for the 45,000 shares. KRK declared and paid $0.30 per share cash dividends on March 15, June 15, September 15, and December 15, 2010. KRK reported net income of $320,000 for the year. At December 31, 2010, the market price of KRK common stock was $24 per share. Instructions (a) Prepare the journal entries for SRK Services for 2010 assuming SRK cannot

SRK Services acquired 30% of the outstanding common stock of KRK Company on January 1, 2010, by paying $800,000 for the 45,000 shares. KRK declared and paid $0.30 per share cash dividends on March 15, June 15, September 15, and December 15, 2010. KRK reported net income of $320,000 for the year. At December 31, 2010, the market price of KRK common stock was $24 per share. Instructions (a) Prepare the journal entries for SRK Services for 2010 assuming SRK cannot

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

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 1MC

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Berry’s Concrete acquired 25% of the outstanding common stock of Blakeley, Inc. on January 1, 2010, by paying $2,000,000 for 80,000 shares. Blakeley declared and paid a $0.50 per share cash dividend on June 30 and again on December 31, 2010. Blakeley reported net income of $1200,000 for the year. At December 31, 2010, the market price of Blakeley’s common stock was $28 per share. Instructions Prepare the journal entries for Berry’s Concrete for 2010 assuming Berry’s cannot exercise significant influence over Blakeley. (Use the cost method and assume Blakeley common stock should be classified as available-for-sale
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…
. 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 January 18, 2020, Ehrlich Company purchased 40,000 shares (10%) of common stock of Portal Corporation as a long-term investment for $950,000. On March 26, 2020, Portal paid dividends of $0.30 per share. On July 19, 2020, Ehrlich sold 10,000 of its shares for $28 per share. On September 29,2020, Portal paid a dividend to shareholders of $0.50 per share. Instructions Prepare the journal entry to record the investment in Portal stock. Record the entry for the receipt of dividends on March 26, 2020 Record the sale of the shares on July 19, 2020 Record the receipt of dividends on September 29,2020 What is the balance of the Stock Investments account on Ehrlich Company's books at the end of the year?.
Heidebrecht Design acquired 25% of the outstanding common stock of Sunland Company on January 1, 2022, by paying $854,000 for the 42,700 shares. Sunland declared and paid $0.30 per share cash dividends on March 15, June 15, September 15, and December 15, 2022. Sunland reported net income of $390,500 for the year. At December 31, 2022, the market price of Sunland common stock was $26 per share. (a) Prepare the journal entries for Heidebrecht Design for 2022 assuming Heidebrecht Design cannot exercise significant influence over Sunland. (Use the cost method.) (Record journal entries in the order presented in the problem. List all debit entries before credit entries. 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 O for the amounts.) Date Account Titles and Explanation Debit Credit
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Presented below are two independent situations. (1) Grand Cosmetics acquired 10% of the 200,000 ordinary shares of Cey Fashion at a total cost of $12 per share on March 18, 2020. On June 30, Cey declared and paid a $60,000 dividend. On December 31, Cey reported net income of $110,000 for the year. At December 31, the market price of Cey Fashion was $15 per share. The shares are classified as non-trading. (2) Unruh, Inc. obtained significant influence over Olsen Corporation by buying 25% of Olsen's 40,000 outstanding ordinary shares at a total cost of $7 per share on January 1. 2020. On June 15, Olsen declared and paid a cash dividend of $30,000. On December 31. Olsen reported a net income of SS0.000 for the year. Instructions Prepare all the necessary journal entries for 2020 for (a) Grand Cosmetics and (b) Unruh, Inc
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On 1 October 2018, KING acquired 30,000 of VAM's 100,000 shares in exchange for 75,000 of its own shares. The market value of KING's shares at the date of this share exchange was $3.20 per share. VAM's net profit for the financial year ended 31 March 2019 was $200,000. $40,000 of this profit was made by VAM from 1 April 2018 to 30 September 2018. VAM is the only associate of KING. What amount will be shown as 'investment in associate' in the consolidated statement of financial position of KING as at 31 March 2019? Please provide explaination. A) $288,000 B) $300,000 C) $156,000 D) $252,000 E) None of the above
On January 1, 2021, AB Company purchased 15,000 shares of C Inc. for P25 per share. A total of P15,000 was incurred in relation to acquisition of these shares. These shares were acquired for short term fluctuation in profit. On July 31, 2021, 5,000 of these shares were sold at P30 per share. On October 31, 2021, a P4 per share dividend was declared to be distributed on January 31, 2022. And the remaining shares were quoted at P28 per share on December 31, 2021. How much is the total net amount reported in its profit or loss for the period ending December 31, 2021?
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