ssessing Financial Statement Effects of Equity Method Securities Use the financial statement effects template to record the following transactions involving investments in marketable securities accounted for using the equity method. a. Purchased 12,000 common shares of Bakersfield Co. at $10 per share; the shares represent 30% ownership in Bakersfield. b. Received a cash dividend of $1.50 per common share from Bakersfield. c. Bakersfield reported annual net income of $75,000. d. Sold all 12,000 common shares of Bakersfield for $128,500. Use negative signs with answers, if appropriate. Balance Sheet Income Statement Noncash Contrib. Earned Transaction Cash Asset + Assets = Liabilities + Captial + Capital Revenues - Expenses = Net income a. Purchased shares of Bakersfield. Answer Answer Answer Answer Answer Answer Answer Answer b. Received cash dividend from Bakersfield. Answer Answer Answer Answer Answer Answer Answer Answer c. Bakersfield reported annual net income. Answer Answer Answer Answer Answer Answer Answer Answer d. Sold all Bakersfield shares. Answer Answer Answer Answer Answer Answer Answer Answe
ssessing Financial Statement Effects of Equity Method Securities Use the financial statement effects template to record the following transactions involving investments in marketable securities accounted for using the equity method. a. Purchased 12,000 common shares of Bakersfield Co. at $10 per share; the shares represent 30% ownership in Bakersfield. b. Received a cash dividend of $1.50 per common share from Bakersfield. c. Bakersfield reported annual net income of $75,000. d. Sold all 12,000 common shares of Bakersfield for $128,500. Use negative signs with answers, if appropriate. Balance Sheet Income Statement Noncash Contrib. Earned Transaction Cash Asset + Assets = Liabilities + Captial + Capital Revenues - Expenses = Net income a. Purchased shares of Bakersfield. Answer Answer Answer Answer Answer Answer Answer Answer b. Received cash dividend from Bakersfield. Answer Answer Answer Answer Answer Answer Answer Answer c. Bakersfield reported annual net income. Answer Answer Answer Answer Answer Answer Answer Answer d. Sold all Bakersfield shares. Answer Answer Answer Answer Answer Answer Answer Answe
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Assessing Financial Statement Effects of Equity Method Securities
Use the financial statement effects template to record the following transactions involving investments in marketable securities accounted for using the equity method.
a. Purchased 12,000 common shares of Bakersfield Co. at $10 per share; the shares represent 30% ownership in Bakersfield.
b. Received a cash dividend of $1.50 per common share from Bakersfield.
c. Bakersfield reported annual net income of $75,000.
d. Sold all 12,000 common shares of Bakersfield for $128,500.
Use negative signs with answers, if appropriate.
| Income Statement | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Noncash | Contrib. | Earned | |||||||||||||
| Transaction | Cash Asset | + | Assets | = | Liabilities | + | Captial | + | Capital | Revenues | - | Expenses | = | Net income | |
| a. Purchased shares of Bakersfield. | Answer | Answer | Answer | Answer | Answer | Answer | Answer | Answer | |||||||
| b. Received cash dividend from Bakersfield. | Answer | Answer | Answer | Answer | Answer | Answer | Answer | Answer | |||||||
| c. Bakersfield reported annual net income. | Answer | Answer | Answer | Answer | Answer | Answer | Answer | Answer | |||||||
| d. Sold all Bakersfield shares. | Answer | Answer | Answer | Answer | Answer | Answer | Answer | Answer |
Expert Solution
Step 1: Introduction:
Financial statements in the business includes income statement and balance sheet. Income statement shows all revenues and all expenses and at the end, it shows net income or loss for the period. Balance sheet shows all assets, liabilities and equity as on particular date.
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