Investment : The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment. Equity investments : The financial instruments which claim ownership in the issuing company and pay a dividend revenue to the investor company, are referred to as equity securities. The investments in equity securities are referred to as equity investments. Equity method : Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in 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 entries related to the investments during 2016, for Company N assuming the investment is made under equity method.

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Answer 1

Question

Chapter 12, Problem 12.12P

1)

To determine

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Equity investments: The financial instruments which claim ownership in the issuing company and pay a dividend revenue to the investor company, are referred to as equity securities. The investments in equity securities are referred to as equity investments.

Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in 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 entries related to the investments during 2016, for Company N assuming the investment is made under equity method.

2)

To determine

To Prepare: The investment revenue account, for Company N.

3)

To determine

To Prepare: The investment account, of Company N in Company V.

4)

To determine

To Explain: The effect of investment by Company N on December 31, 2016, in the statement of cash flows.

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Accounting

Brun Company produces its product through two processing departments: Mixing and Baking. Information for the Mixing department follows. Direct Materials Conversion Unit Percent Complete Percent Complete Beginning work in process inventory 7.500 Units started this period 104,500 Units completed and transferred out 100.000 Ending work in process inventory 12.000 100% 25% Beginning work in process inventory Direct materials Conversion $6.800 14.500 $21.300 Costs added this period Drect materials 116,400 Conversion Total costs to account for 1.067,000 1.183.400 $1.204.700 Required 1. Prepare the Mixing department's production cost report for November using the weighted average method Check (1) C$1.000 2. Prepare the November 30 journal entry to transfer the cost of completed units from Mixing to Baking

Answer 2

Question

Chapter 12, Problem 12.12P

1)

To determine

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Equity investments: The financial instruments which claim ownership in the issuing company and pay a dividend revenue to the investor company, are referred to as equity securities. The investments in equity securities are referred to as equity investments.

Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in 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 entries related to the investments during 2016, for Company N assuming the investment is made under equity method.

2)

To determine

To Prepare: The investment revenue account, for Company N.

3)

To determine

To Prepare: The investment account, of Company N in Company V.

4)

To determine

To Explain: The effect of investment by Company N on December 31, 2016, in the statement of cash flows.

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Answer 3

Question

Chapter 12, Problem 12.12P

1)

To determine

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Equity investments: The financial instruments which claim ownership in the issuing company and pay a dividend revenue to the investor company, are referred to as equity securities. The investments in equity securities are referred to as equity investments.

Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in 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 entries related to the investments during 2016, for Company N assuming the investment is made under equity method.

2)

To determine

To Prepare: The investment revenue account, for Company N.

3)

To determine

To Prepare: The investment account, of Company N in Company V.

4)

To determine

To Explain: The effect of investment by Company N on December 31, 2016, in the statement of cash flows.

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Answer 4

Question

Chapter 12, Problem 12.12P

1)

To determine

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Equity investments: The financial instruments which claim ownership in the issuing company and pay a dividend revenue to the investor company, are referred to as equity securities. The investments in equity securities are referred to as equity investments.

Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in 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 entries related to the investments during 2016, for Company N assuming the investment is made under equity method.

2)

To determine

To Prepare: The investment revenue account, for Company N.

3)

To determine

To Prepare: The investment account, of Company N in Company V.

4)

To determine

To Explain: The effect of investment by Company N on December 31, 2016, in the statement of cash flows.

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Answer 5

Chapter 12, Problem 12.12P

1)

To determine

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Equity investments: The financial instruments which claim ownership in the issuing company and pay a dividend revenue to the investor company, are referred to as equity securities. The investments in equity securities are referred to as equity investments.

Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in 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 entries related to the investments during 2016, for Company N assuming the investment is made under equity method.

2)

To determine

To Prepare: The investment revenue account, for Company N.

3)

To determine

To Prepare: The investment account, of Company N in Company V.

4)

To determine

To Explain: The effect of investment by Company N on December 31, 2016, in the statement of cash flows.

Answer 6

Chapter 12, Problem 12.12P

1)

To determine

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Equity investments: The financial instruments which claim ownership in the issuing company and pay a dividend revenue to the investor company, are referred to as equity securities. The investments in equity securities are referred to as equity investments.

Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in 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 entries related to the investments during 2016, for Company N assuming the investment is made under equity method.

Answer 7

Chapter 12, Problem 12.12P

1)

To determine

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Equity investments: The financial instruments which claim ownership in the issuing company and pay a dividend revenue to the investor company, are referred to as equity securities. The investments in equity securities are referred to as equity investments.

Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in 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 entries related to the investments during 2016, for Company N assuming the investment is made under equity method.

Answer 8

2)

To determine

To Prepare: The investment revenue account, for Company N.

Answer 9

2)

To determine

To Prepare: The investment revenue account, for Company N.

Answer 10

3)

To determine

To Prepare: The investment account, of Company N in Company V.

Answer 11

3)

To determine

To Prepare: The investment account, of Company N in Company V.

Answer 12

4)

To determine

To Explain: The effect of investment by Company N on December 31, 2016, in the statement of cash flows.

Answer 13

4)

To determine

To Explain: The effect of investment by Company N on December 31, 2016, in the statement of cash flows.

Answer 14

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Answer 15

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Answer 16

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Answer 17

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

Concept explainers

To Prepare: The investment revenue account, for Company N.

To Prepare: The investment account, of Company N in Company V.

To Explain: The effect of investment by Company N on December 31, 2016, in the statement of cash flows.

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Chapter 12 Solutions