Answered: Sutton Company purchased 10% of the…

Business

Accounting

Sutton Company purchased 10% of the outstanding stock of Roberts Company on January 1, 2012. Roberts re

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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Earlyrain Inc.'s 2023 income statement, excluding the earnings per share portion of the statement, was as follows: Revenues Expenses: Depreciation. Income taxes Other expenses Profit from continuing operations Loss from operating discontinued business segment (net of $18,900 tax benefit) Loss on sale of business segment (net of $11,720 tax benefit). Profit Profit from continuing operations Loss from discontinued operations Profit Basic $520,000 $ 44,100 59,500 178,000 281,600 $238,400 $ 51,500 31,600 The weighted-average number of common shares outstanding during the year was 100,000 Present the earnings per share portion of the 2023 income statement. (Round the final answers to 2 decimal places. Loss should be entered with negative sign.) (83,100) $155,300
Presented below is information related to the purchases of common stock by Cheyenne Company during 2020. Cost(at purchase date) Fair Value(at December 31) Investment in Arroyo Company stock $97,000 $76,000 Investment in Lee Corporation stock 266,000 311,000 Investment in Woods Inc. stock 176,000 185,000 Total $539,000 $572,000 (Assume a zero balance for any Fair Value Adjustment account.) (a) What entry would Cheyenne make at December 31, 2020, to record the investment in Arroyo Company stock if it chooses to report this security using the fair value option? (b) What entry would Cheyenne make at December 31, 2020, to record the investments in the Lee and Woods corporations, assuming that Cheyenne did not select the fair value option for these investments? (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…
The following account balances are for the Agee Company as of January 1, 2017, and December 31, 2017. All amounts are denominated in kroner (Kr).Additional Information• Agee issued additional shares of common stock during the year on April 1, 2017. Common stock at January 1, 2017, was sold at the start of operations in 2010.• Agee purchased buildings in 2011 and sold one building with a book value of Kr 1,500 on July 1 of the current year.• Equipment was acquired on April 1, 2017.Relevant exchange rates for 1 Kr were as follows:a. Assuming the U.S. dollar is the functional currency, what is the remeasurement gain or loss for 2017? The December 31, 2016, U.S. dollar–translated balance sheet reported retained earnings of $145,200, which included a remeasurement loss of $28,300.b. Assuming the foreign currency is the functional currency, what is the translation adjustment for 2017? The December 31, 2016, U.S. dollar–translated balance sheet reported retained earnings of $162,250 and a…
Presented below is information related to the purchases of common stock by Marigold Company during 2025. Investment in Arroyo Company stock Investment in Lee Corporation stock Investment in Woods Inc. stock Total (a) (b) Cost Fair Value (at purchase date) (at December 31) $102,000 $84,000 314,000 259,000 (b) 184,000 (Assume a zero balance for any Fair Value Adjustment account at the beginning of 2025.) $545,000 No. Account Titles and Explanation (a) 193,000 $591,000 What entry would Marigold make at December 31, 2025, to record the investment in Arroyo Company stock if it chooses to report this security using the fair value option? What entry would Marigold make at December 31, 2025, to record the investments in the Lee and Woods corporations, assuming that Marigold did not select the fair value option for these investments? (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…
Pearl Corporation paid $300,000 on January 1, 2010 for a 35% interest in Sandlin Inc. On January 1, 2010, the book value of Sandlin's stockholders' equity consisted of $400,000 of common stock and $400,000 of retained earnings. All the excess purchase cost over book value acquired was attributable to a patent with an estimated life of 5 years. During 2010 and 2011, Sandlin paid $6,000 of dividends each quarter and reported net income of $120,000 for 2010 and S160,000 for 2011. Pearl used the equity method. Required: 1. Calculate Pearl's income from Sandlin for 2010. 2. Determine the balance of Pearl's Investment in Sandlin account on December 31, 2010
On January 1, 2015, Fisher Corporation paid $2,290,000 for 35 percent of the outstanding voting stock of Steel, Inc., and appropriately applies the equity method for its investment.Any excess of cost over Steel’s book value was attributed to goodwill. During 2015, Steel reports $720,000 in net income and a $100,000 other comprehensive income loss. Steel also declares and pays $20,000 in dividends. What amount should Fisher report as its Investment in Steel on its December 31, 2015, balance sheet? What amount should Fisher report as Equity in Earnings of Steel on its 2015 income statement?
on January 1, 2014. The following information is available for Santini at that time. Book Value Fair Value Difference Current assets $40,000 $50,000 $10,000 Plant assets 60,000 75,000 15,000 Liabilities (50,000) (50,000) 0 Net assets $50,000 $75,000 Paroz Corporation acquired a 70% interest in Sandberg Corporation for $900,000 when Sandberg's stockholders' equity consisted of $600,000 of Capital Stock and $600,000 of Retained Earnings. The fair values of Sandberg's net assets were equal to their recorded book values. At the time of acquisition, on Paroz's books, Paroz will record goodwill for $60,000 under the parent company theory. goodwill for $85,714 under the entity theory. investment in Sandberg for $1,285,714 under the entity theory. investment in Sandberg for $900,000 under the entity and parent company theories.
Gates Corp. has 150,000 shares of common stock outstanding. In 2017, the company reports income from continuing operations before income tax of $1,500,000. Additional transactions not considered in the $1,300,000 are as follows. The company discontinued operations of one of its subsidiaries during the current year. Assume that this transaction meets the criteria for discontinued operations. The loss from operations of the discontinued subsidiary was $90,000 before taxes; the loss from disposal of the subsidiary was $110,000 before taxes. Analyze the above information and prepare an income statement for the year 2017, starting with income from continuing operations before income tax. Compute earnings per share as it should be shown on the face of the income statement. (Assume a total effective tax rate of 38% on all items, unless otherwise indicated.) Prepare your answer here in the proper format: Income from Continuing Operations Before Income Tax: All Earnings Per Share calculations:
On January 1, 2012, Par Company purchased 80% of the common stock of Sar Company for $640,000. On this date, Sar had common stock, other paid-in capital, and retained earnings of $120,000, $220,000, and $360,000, respectively. Net income and dividends for 2 years for Sar Company were as follows: 2012 2013 Net income $200,000 $250,000 Dividends 30,000 60,000 On January 1, 2012, the only tangible assets of Sar that were undervalued were inventory and building. Inventory, for which FIFO is used, was worth $20,000 more than cost. The inventory was sold in 2012. Building, which was worth $40,000 more than book value, has a remaining life of 10 years, and straight-line depreciation is used. Any remaining excess is goodwill. Required: Please show all of your computations in good form Prepare a value analysis schedule Prepare a determination and distribution of excess schedule Prepare Par’s 2012 and 2013 journal entries (after the purchase has been…
On January 1, 2008, Lallo Company purchased 15% of Vintar Company’s ordinary shares for P20,000,000. Thefollowing data concerning Vintar Company are available:2008Net incomeP6,000,000Cash dividend paid None2009Net incomeP7,000,000Cash dividend paid15,000,000In its income statement for the year ended December 31, 2009, how much should Lallo report as income from this investment?
Griggs Company bought 30% of Jackson Corporation in 2020. During 2020, Jackson reported net income in the amount of P400,000 and declared and paid dividends in the amount of P50,000. Griggs mistakenly accounted for the investment using the cost method instead of the equity method. What effect would this error have on the investment account and net income, respectively, for 2020? Choices: Overstated by P105,000; understated by P105,000. Understated by P105,000; understated by P105,000. Understated by P120,000; overstated by P105,000. Overstated by P120,000; overstated by P120.000.
Rahul