Use the following information for the Problems below. (Algo)[The following information applies to the questions displayed below.]Selk Steel Company, which began operations in Year 1, had the following transactions and events in its long-terminvestments.Year 1January 5 Selk purchased 45,000 shares (20% of total) of Kildaire's common stock for $1,080,000.October 23 Kildaire declared and paid a cash dividend of $2.90 per share.December 31 Kildaire's net income for the year is $1,111,000, and the fair value of its stock at December 31 is $32 pershare.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 $1,139,000, and the fair value of its stock at December 31 is $34 pershare.Year 3January 2 Selk sold 3% (equal to 1,350 shares) of its investment in Kildaire for $69,500 cash.Problem C-5A (Algo) Accounting for long-term investments in stock with significant influence LO P5Required: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.

Step 1: Here are the journal entries to record the transactions and events for Selk:Year 1:January…

Answered: Use the following information for the…

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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On January 2, Cohan Company acquired 40% of the outstanding stock of Sanger Company for $677,000. For the year ended December 31, Sanger Company earned income of $149,000 and paid dividends of $27,500. Prepare the entries for Cohan Company for the purchase of the stock, the share of Sanger income, and the dividends received from Sanger Company. Refer to the Chart of Accounts for exact wording of account titles.
Willard Co. acquired a 30% interest in Diltronics for $420,000 and appropriately applied the equity method. During the first year, Diltronics reported net income of $250,000 and paid cash dividends totaling $50,000. What amount will Willard report as it relates to the investment at the end of the first year on its income statement? Show the calculation used to get the answer Investment earnings totaling $75,000 Investment earnings totaling $45,000 Net investment earnings totaling $150,000 Receipt of dividends totaling $15,000
The following equity investment transactions were completed by Vintage Company during a recent year: Apr. 10. Purchased 11,000 shares of Delew Company's common stock for a price of $60 per share plus a brokerage commission of $220. Delew Company has 250,000 shares of common stock outstanding. Received a quarterly dividend of $0.85 per share on the Delew Company investment. Sold 3,000 shares for a price of $54 per share less a brokerage commission of $90. July 8. Sept. 10. Dec. 31. At the end of the accounting period, the fair value of the remaining 8,000 shares of Delew Company's stock was $59.90 per share. Journalize the entries for these transactions. If an amount box does not require an entry, leave it blank. If required, round the final answers to the nearest dollar.
McVie Corporation’s stock has a par value of $2. The company has the following transactions during the year: Feb. 28 Issued 340,000 shares at $4 share. Jun. 7 Issued 95,000 shares in exchange for equipment with a clearly determined value of $206,000. Sep. 19 Purchased 2,100 shares of treasury stock at $6 per share. Prepare the journal entries to record the transactions. If an amount box does not require an entry, leave it blank. Feb. 28 Jun. 7 Sept. 19
Bellows Inc. purchased 10,000 shares of Nesbitt Inc.’s common stock for $7.50 per share. Nesbitt Inc. has 100,000 shares of common stock outstanding. What account and amount is debited by Bellows Inc. to record the investment in Nesbitt Inc.? Assuming that Nesbitt Inc. paid a dividend of $0.40 per share, what account and amount is credited by Bellows Inc. to record the receipt of the dividend? 3 If Bellows Inc. sold 4,000 shares of Nesbitt Inc.’s common stock for $9.00 per share, how much gain on the investment would Bellows Inc. recognize?
On January 15, Pinkney, Incorporated, issued 10,000 shares of $10 par value common stock in exchange for land and a building. Five years ago, the stockholder purchased the land for $40,000 and constructed the building at a cost of $90,000. At the time of the stock issuance, the land and the building had fair market values of $45,000 and $95,000, respectively. Complete the necessary journal entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns. View transaction list Journal entry worksheet 1 On January 15, Pinkney, Inc., issued 10,000 shares of $10 par value common stock in exchange for land and a building. Five years ago, the stockholder purchased the land for $40,000 and constructed the building at a cost of $90,000. At the time of the stock issuance, the land and the building had fair Note: Enter debits before credits. Date Jan 15 General Journal Debit Credit
The Ivanhoe Corporation has 94,600 $2.00 noncumulative preferred shares that have been issued. It declares a quarterly cash dividend on May 15 to shareholders of record on June 10. The dividend is paid on June 30. Prepare the entries on the appropriate dates to record the cash dividend. (List all debit entries before credit entries. Record journal entries in the order presented in the problem. Credit account titles are automatically indented when the 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 Debit Credit
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…
Use the following information to answer the question below. 33 The following transactions involving Lupine Corporation occurred during the year: lot et cell Apr. 1 Purchased 2,000 shares of its own preferred stock for $20, the current market price. This is the first transaction involving its own stock engaged in by the company. May 3 Sold 400 of the shares purchased on April 1 for $25 per share. June 5 Retired 600 of the shares purchased on April 1. The original issue price was $10. The par value of the stock is $5. The entry to record the May 3 transaction is A) Preferred Stock $ 3,000 Additional Paid in Capital, Preferred $ 3,000 Treasury Stock, Preferred vode $ to a 6,000 $ to als 6,0000 yns srl 25 B) Treasury Stock, Preferred Cash $50 6,000 C) Cash 10,000 $ obo12 nomme Treasury Stock $ 8,000 Additional Paid in Capital, Treasury Stocks $ 2,000 D) Preferred Stock $ Treasury Stock, Preferred 12,000 2012 Additional Paid in Capital, Preferred Retained Earnings E) none of the above 3,000…
Jackson Moving & Storage Co. paid $120,000 for 25% of the common stock ofMcDonough Co. at the beginning of the year. During the year, McDonough earned netincome of $50,000 and paid dividends of $20,000. The carrying value of Jackson’s investment in McDonough at the end of the year isa. $150,000.b. $170,000.c. $120,000.d. $127,500.
McVie Corporation’s stock has a par value of $2. The company has the following transactions during the year: Feb. 28 Issued 330,000 shares at $5 share. Jun. 7 Issued 93,000 shares in exchange for equipment with a clearly determined value of $205,000. Sep. 19 Purchased 2,700 shares of treasury stock at $7 per share. Prepare the journal entries to record the transactions. If an amount box does not require an entry, leave it blank. Feb. 28 fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 fill in the blank 8 fill in the blank 9 Jun. 7 fill in the blank 11 fill in the blank 12 fill in the blank 14 fill in the blank 15 fill in the blank 17 fill in the blank 18 Sep. 19 fill in the blank 20 fill in the blank 21 fill in the blank 23 fill in the blank 24

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