What is the amount of consolidated net income for the year? Veerappan Corp. paid $3,000,000 to acquire all of thecommon stock of Jensen Inc. on January 1, 2015.Jensen's reported earnings for 2015 totaled $500,000,and it paid $150,000 in dividends during the year. Theamortization of allocations related to the investmentwas $30,000. Veerappan's net income, not includingthe investment, was $4,200,000, and it paid dividendsof $1,100,000.What is the amount of consolidated net income for theyear 2015?

Explanation of Consolidated Net Income:Consolidated Net Income represents the total earnings of a…

Answered: Veerappan Corp. paid $3,000,000 to…

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 July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in Associate account be debited/credited in 2018? P1,035,000 Cr. P1,060,000 Cr. P40,000 Dr. No entry How much will the Investment in Associate account be debited/credited in 2019? P960,000 Cr. No Entry P15,000 Dr. P75,000 Dr.
BuyCo, Inc. holds 25 percent of the outstanding shares of Marqueen Company and appropriately applies the equity method of accounting. Excess cost amortization (related to a patent) associated with this investment amounts to $10,000 per year. For 2017, Marqueen reported earnings of $100,000 and declares cash dividends of $30,000. During that year, Marqueen acquired inventory for $50,000, which it then sold to BuyCo for $80,000. At the end of 2017, BuyCo continued to hold merchandise with a transfer price of $32,000.a. What Equity in Investee Income should BuyCo report for 2017?b. How will the intra-entity transfer affect BuyCo’s reporting in 2018?c. If BuyCo had sold the inventory to Marqueen, how would the answers to (a) and (b) have changed?
Scott Company paid $2.800,000 to acquire all of the common stock of Dawn Corporation on January 1, 2023. Dawn's mported eanings for 2023 totaled $512.000 and it $160,000 in dividends during the year. The amortization of allocations related to the investment was $28.000. Scott's net income not including the investment, was $3.310.000 and it paid dividends of $950,000. What is the amount of consolidated net income for the year 2023? O $3,150.000 O $3.282.000 O $3.310.000 O $3,794,000 O $3.822.000
Stinson Corporation owned 40,000 shares of Matile Corporation. These shares were purchased in 2017 for $360,000. On November 15, 2021, Stinson declared a property dividend of one share of Matile for every ten shares of Stinson held by a stockholder. On that date, when the market price of Matile was $28 per share, there were 360,000 shares of Stinson outstanding. What gain and net reduction in retained earnings would result from this property dividend? Net Reduction in Gain Retained Earnings a. $0 $ 324,000 b. $0 $1,008,000 c. $684,000 $ 324,000 d. $684,000 $ 144,000
Matthew, Inc. owns 30 percent of the outstanding stock of Lindman Company and has the ability to significantly influence the investee’s operations and decision making. On January 1, 2018, the balance in the Investment in Lindman account is $335,000. Amortization associated with this acquisition is $9,000 per year. In 2018, Lindman earns an income of $90,000 and declares cash dividends of $30,000. Previously, in 2017, Lindman had sold inventory costing $24,000 to Matthew for $40,000. Matthew consumed all but 25 percent of this merchandise during 2017 and used the rest during 2018. Lindman sold additional inventory costing $28,000 to Matthew for $50,000 in 2018. Matthew did not consume 40 percent of these 2018 purchases from Lindman until 2019.a. What amount of equity method income would Matthew recognize in 2018 from its ownership interest in Lindman?b. What is the equity method balance in the Investment in Lindman account at the end of 2018?
Pierson Corporation owned 10,000 shares of Hunter Corporation. These shares were purchased in 2011 for $90,000. On November 15, 2015, Pierson declared a property dividend of one share of Hunter for every ten shares of Pierson held by a stockholder. On that date, when the market price of Hunter was $28 per share, there were 90,000 shares of Pierson outstanding. What gain and net reduction in retained earnings would result from this property dividend? Gain = SWER Net reduction in R/E= 90,000+ 10x128= 9000 x 28 = 252 of $10 par value common stock outstand the market price of the st A
Matthew, Inc. owns 30 percent of the outstanding stock of Lindman Company and has the ability to significantly influence the investee’s operations and decision making. On January 1, 2018, the balance in the Investment in Lindman account is $365,000. Amortization associated with this acquisition is $12,600 per year. In 2018, Lindman earns an income of $132,000 and declares cash dividends of $33,000. Previously, in 2017, Lindman had sold inventory costing $33,600 to Matthew for $56,000. Matthew consumed all but 20 percent of this merchandise during 2017 and used the rest during 2018. Lindman sold additional inventory costing $44,800 to Matthew for $80,000 in 2018. Matthew did not consume 40 percent of these 2018 purchases from Lindman until 2019. What amount of equity method income would Matthew recognize in 2018 from its ownership interest in Lindman? What is the equity method balance in the Investment in Lindman account at the end of 2018?
On July 1, 2016, Miller Company purchased 25% of Wall Company’s outstanding ordinary shares and no goodwill resulted from the purchase. Miller appropriately carried this investment at equity and the balance in Miller’s investment account was ₱1,900,000 on December 31, 2016. Wall Company reported net income of ₱1,200,000 for the year ended December 1, 2016, and paid dividend totaling ₱480,000 on December 31, 2016. How much did Miller pay for the 25% interest in Wall? a. 1,720,000b. 2,020,000c. 1,870,000d. 2,170,000 What is the solution for option C?
Porter Corporation purchased 80% of the common stock of Salem Company for $850,000 on January 1, 2013. During the next three years, Salem had the following income and Dividends paid: Year Income Dividends 2013 $100,000 $25,000 2014 $110,000 $35,000 2015 $170,000 $60,000 Prepare the journal entries made under both methods and then compute the ending balance in the "investment" account under both methods.
Boxer Company owned 20,000 shares of King Company that were purchased in 2016 for $500,000O. On May 1, 2018, Boxer declared a property dividend of 1 share of King for every 10 shares of Boxer stock. On that date, there were 50,000 shares of Boxer stock outstanding. The market value of the King stock was $30 per share on the date of declaration and $32 per share on the date of distribution. By how much is retained earnings reduced by the property dividend?
Swifty Corporation has income from continuing operations of $319,000 for the year ended December 31, 2022. It also has the following items (before considering income taxes). 1. An unrealized loss of $58,800 on available-for-sale securities. 2. A gain of $25,300 on the discontinuance of a division (comprised of a $8,200 loss from operations and a $33,500 gain on disposal). Assume all items are subject to income taxes at a 20% tax rate.Prepare a partial income statement, beginning with income from continuing operations, and a statement of comprehensive income. SWIFTY CORPORATIONPartial Income Statementchoose the accounting period select an income statement item $enter a dollar amount select an income statement item select an income statement item…
On January 4, 2018, Watts Co. purchased 40,000 shares (40%) of the common stock of Adams Corp., paying $800,000. There was no goodwill or other cost allocation associated with the investment. Watts has signiﬁcant inﬂuence over Adams. During 2018, Adams reported income of $200,000 and paid dividends of $80,000. On January 2, 2019, Watts sold 5,000 shares for $125,000. What was the balance in the investment account after the shares had been sold?

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