Equity investment : Equity investments are stock instruments which claim ownership in the investee company and pay a dividend revenue to the investor company. Fair value through net income method : This is the accounting method used for accounting stock or equity investments which claim less than 20% of the outstanding stock of the investee company. Journal entry : Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Debit and credit rules: Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts. Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts. To journalize : The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,175,000, and the cost of shares was $1,345,000

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Answer 1

Question

Chapter 12, Problem 12.12E

(1)

To determine

Equity investment: Equity investments are stock instruments which claim ownership in the investee company and pay a dividend revenue to the investor company.

Fair value through net income method: This is the accounting method used for accounting stock or equity investments which claim less than 20% of the outstanding stock of the investee company.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,175,000, and the cost of shares was $1,345,000

(2)

To determine

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

(3)

To determine

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000

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Can you solve this financial accounting question with the appropriate financial analysis techniques?

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Fenton Manufacturing Inc. had a variable costing operating income of $128,400 in 2023. Ending inventory decreased during 2023 from 45,000 units to 40,000 units. During both 2022 and 2023, fixed manufacturing overhead was $1,080,000, and 135,000 units were produced. Determine the absorption costing operating income for 2023.

Answer 2

Question

Chapter 12, Problem 12.12E

(1)

To determine

Equity investment: Equity investments are stock instruments which claim ownership in the investee company and pay a dividend revenue to the investor company.

Fair value through net income method: This is the accounting method used for accounting stock or equity investments which claim less than 20% of the outstanding stock of the investee company.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,175,000, and the cost of shares was $1,345,000

(2)

To determine

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

(3)

To determine

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000

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Answer 3

Question

Chapter 12, Problem 12.12E

(1)

To determine

Equity investment: Equity investments are stock instruments which claim ownership in the investee company and pay a dividend revenue to the investor company.

Fair value through net income method: This is the accounting method used for accounting stock or equity investments which claim less than 20% of the outstanding stock of the investee company.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,175,000, and the cost of shares was $1,345,000

(2)

To determine

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

(3)

To determine

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000

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Answer 4

Question

Chapter 12, Problem 12.12E

(1)

To determine

Equity investment: Equity investments are stock instruments which claim ownership in the investee company and pay a dividend revenue to the investor company.

Fair value through net income method: This is the accounting method used for accounting stock or equity investments which claim less than 20% of the outstanding stock of the investee company.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,175,000, and the cost of shares was $1,345,000

(2)

To determine

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

(3)

To determine

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000

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Answer 5

Chapter 12, Problem 12.12E

(1)

To determine

Equity investment: Equity investments are stock instruments which claim ownership in the investee company and pay a dividend revenue to the investor company.

Fair value through net income method: This is the accounting method used for accounting stock or equity investments which claim less than 20% of the outstanding stock of the investee company.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,175,000, and the cost of shares was $1,345,000

(2)

To determine

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

(3)

To determine

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000

Answer 6

Chapter 12, Problem 12.12E

(1)

To determine

Equity investment: Equity investments are stock instruments which claim ownership in the investee company and pay a dividend revenue to the investor company.

Fair value through net income method: This is the accounting method used for accounting stock or equity investments which claim less than 20% of the outstanding stock of the investee company.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,175,000, and the cost of shares was $1,345,000

Answer 7

Chapter 12, Problem 12.12E

(1)

To determine

Equity investment: Equity investments are stock instruments which claim ownership in the investee company and pay a dividend revenue to the investor company.

Fair value through net income method: This is the accounting method used for accounting stock or equity investments which claim less than 20% of the outstanding stock of the investee company.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,175,000, and the cost of shares was $1,345,000

Answer 8

(2)

To determine

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

Answer 9

(2)

To determine

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

Answer 10

(3)

To determine

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000

Answer 11

(3)

To determine

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000

Answer 12

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Answer 15

Ch. 12 - Prob. 12.1Q Ch. 12 - When market rates of interest rise after a...Ch. 12 - Does GAAP distinguish between fair values that are...Ch. 12 - When a debt investment is acquired to be held for...Ch. 12 - Prob. 12.5Q Ch. 12 - What is comprehensive income? Its composition...Ch. 12 - Why are holding gains and losses treated...Ch. 12 - Prob. 12.8Q Ch. 12 - Prob. 12.9Q Ch. 12 - Prob. 12.10Q

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To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

To journalize: The adjusting entry as at December 31, 2016, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000

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