The summarized balance sheets of Cullumber Company and Vaughn Company as of December 31, 2021 are as follows: Cullumber Company Balance Sheet December 31, 2021 Assets $2440000 Liabilities $310000 Capital stock 1220000 Retained earnings 910000 Total equities $2440000 Vaughn Company Balance Sheet December 31, 2021 Assets $1840000 Liabilities $420000 Capital stock 1170000 Retained earnings 250000 Total equities $1840000 If Cullumber Company acquired a 30% interest in Vaughn Company on December 31, 2021 for $450000 and during 2022 Vaughn Company had net income of $151000 and paid a cash dividend of $61000, applying the equity method would give a debit balance in the Equity Investments (Vaughn) account at the end of 2022 of $431700. $495300. $477000. $450000.
The summarized balance sheets of Cullumber Company and Vaughn Company as of December 31, 2021 are as follows: Cullumber Company Balance Sheet December 31, 2021 Assets $2440000 Liabilities $310000 Capital stock 1220000 Retained earnings 910000 Total equities $2440000 Vaughn Company Balance Sheet December 31, 2021 Assets $1840000 Liabilities $420000 Capital stock 1170000 Retained earnings 250000 Total equities $1840000 If Cullumber Company acquired a 30% interest in Vaughn Company on December 31, 2021 for $450000 and during 2022 Vaughn Company had net income of $151000 and paid a cash dividend of $61000, applying the equity method would give a debit balance in the Equity Investments (Vaughn) account at the end of 2022 of $431700. $495300. $477000. $450000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The summarized balance sheets of Cullumber Company and Vaughn Company as of December 31, 2021 are as follows:
If Cullumber Company acquired a 30% interest in Vaughn Company on December 31, 2021 for $450000 and during 2022 Vaughn Company had net income of $151000 and paid a cash dividend of $61000, applying the equity method would give a debit balance in the Equity Investments (Vaughn) account at the end of 2022 of
|
Cullumber Company |
|
| Assets | $2440000 |
| Liabilities | $310000 |
| Capital stock | 1220000 |
| 910000 | |
| Total equities | $2440000 |
|
Vaughn Company |
|
| Assets | $1840000 |
| Liabilities | $420000 |
| Capital stock | 1170000 |
| Retained earnings | 250000 |
| Total equities | $1840000 |
If Cullumber Company acquired a 30% interest in Vaughn Company on December 31, 2021 for $450000 and during 2022 Vaughn Company had net income of $151000 and paid a cash dividend of $61000, applying the equity method would give a debit balance in the Equity Investments (Vaughn) account at the end of 2022 of
$431700.
$495300.
$477000.
$450000.
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