Zach Company owns 45% of the voting stock of Tomas Corporation and uses the equity method in recording this investment. Tomas Corporation reported a $9,700 net loss. Zach Company's entry would include aa. credit to the investment account for $4,365b. credit to a loss account for $4,365c. debit to the investment account for $4,365Od. credit to cash for $4,365

The equity method is the method of recording transactions related to a particular investment. Under…

Answered: Zach Company owns 45% of the voting…

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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PROBLEMA II. On January 1, 20X1, Romaly Corporation purchased the net assets of Lulor Company for $1,500,000. On this date, a condensed balance sheet for Lulor showed: Account Name Current Assets Long-Term Investments in Securities Land Building (net) Total Assets Current Liabilities Long-Term Liabilities Common Stock (no-par) Retained Earnings Total Liabilities & Stockholders' Equity DATE GENERAL JOURNAL Land Building Total ACCOUNT NAME Remaining amount assignable to Land and Building: Book Value $ Required: Record the entry on Romaly's books for the acquisition of Lulor's net assets. Prepare supporting schedules as necessary. SOLUCIÓN PROBLEMA II 500,000 200,000 100,000 700,000 $1,500,000 P/R $300,000 550,000 300,000 350,000 $1,500,000 Fair Value DEBIT $800,000 150,000 600,000 900,000 $300,000 600,000 CREDIT Fair Value % of Total Fair Value Total Cost Assignable Assigned Value
Fill in the dollar changes caused in the Investment account and Dividend Revenue or Investment Revenue account by each of the following transactions, assuming George Company unes (a) the fair value method and (b) the equity method for accounting for its investments in Tiffany Company (a) Fair Value Method. Transaction (b) Equity Method Investment Dividend Investment Investment Account Revenue Account Revenue 1. At the beginning of Year 1. George bought 40% of Tiffany's common stock at its book value. Total book value of all Tiffany's common stock was $1,000,000 on this date. 2. During Year 1, Tiffany reported $50,000 of net income and paid $50,000 of dividends. 3. During Year 2, Tiffany reported $100,000 of net income and paid $20,000 of dividends. 4. During Year 3, Tiffany reported a net loss of $15,000 and paid $5,000 of dividends. 5. Indicate the Year 3 ending balance in the Investment account, and cumulative totals for Years 1, 2, and 3 for dividend revenue and investment revenue.…
(44). Subject:- Accounting On March 1, Emma Corp purchased 1,900 (or 11%) of the common shares of Christine Corp for $40 per share. Brokerage fees of $1,100 were incurred on the purchase. On December 1, Christine Corp declared and paid $30,000 of dividends. On December 31, shares of Christine Corp were trading at $62 per share. The investment was recorded using FVTOCI. What amount would be recorded to the "Investment in Christine Corp" account on March 1?
Accounting for equity investments On January 6, 20Y8, Bulldog Co. purchased 34% of the outstanding common stock of Gator Co. for $225,000. Gator Co. paid total dividends of $20,000 to all shareholders on June 30, 20Y8. Gator had a net loss of $55,000 for 20Y8. a. Journalize Bulldog's purchase of the stock, receipt of the dividends, and the adjusting entry for the equity loss in Gator Co. stock. If an amount box does not require an entry, leave it blank. 20Y8 Jan. 6 20Y8 June 30 20Y8 Dec. 31 b. Compute the balance of Investment in Gator Co. Stock on December 31, 20Y8.
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Brooks Company purchases debt investments as trading securities at a cost of $71,000 on December 27. This is its first and only purchase of such securities. At December 31, these securities had a fair value of $90,000. Brooks sells a portion of its trading securities (costing $35,500) for $40,250 cash. Analyze each transaction above by showing its effects on the accounting equation-specifically, identify the accounts and amounts (including + or -) for each transaction.
Under the accumulated other comprehensive income in stockholders’ equity section of its December 31, year 2 balance sheet, what amount should Stone report? *
thout making journal entries. this 4. Vaughn Company began operations in 2024. Since then, it has reported the following gains and losses for its equity investments on the income statement: 2024 2025 2026 Gains (losses) from sale of securities $14,100 $(20,900) $13,800 Unrealized holding losses on valuation of securities (25,100) Unrealized holding gain on valuation of securities At January 1, 2027, Vaughn owned the following securities: Cost BKD Common (16,000 shares @ $32) $512,000 LRF Preferred (2,400 shares @ $106) 254,400 10,400 (14,700)
Concord Corporation purchased for $285,000 a 25% interest in Murphy, Inc. This investment enables Concord to exert significant influence over Murphy. During the year, Murphy earned net income of $185,000 and paid dividends of $54,000.Prepare Concord’s journal entries related to this investment. (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 for the amounts.) Account Titles and Explanation Debit Credit enter an account title to record the purchase enter a debit amount enter a credit amount enter an account title to record the purchase enter a debit amount enter a credit amount (To record the purchase.) enter an account title to record the net income enter a debit amount enter a credit amount enter an account title to record the net income enter a debit amount enter a credit amount (To record the net income.)…
. Journal entries using the Cost and Equity Method of accounting for the for the following transtation : On 1/2/18 the Xylo Corp. purchased 8000 shares of ABC Co. Common Stock At $20 per share. ABC Co. has 40000 shares of Common Stock outstanding. On 10/31/18 Xylo Corp. received a $1.50 per share dividend from ABC Co. On 12/30/18 ABC Company announced earnings of for the year at $200000. Prepare the calculations and Journal Entries, in good form, if the Investment is classified as Available for sale Part A. The Cost Method. Part B The Equity Method of accounting is applicable.
Ramiro Company purchased 40% of the outstanding stock of Marco Company on January 1. Marco reported net income of $88,600 and declared dividends of $20,600 during the year. How much would Ramiro adjust its investment in Marco Company under the equity method? of $ Previous Next 3:23 PM a 53 F Sunny 12/14/2021 2.
What will be the balance in the investment account on December 31, 20y4 under the equity method of accounting? A. 152,000 B. 150,000 C. 159,200 D. 155,600

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