Financial Accounting
15th Edition
ISBN: 9781337272124
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 15, Problem 11E
(a)
To determine
Journalize the stock investment transactions for Company F, under the equity method.
(b)
To determine
Calculate the stock investment balance for Company F.
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On January 4, Year 1, Ferguson Company purchased 480,000 shares of Silva Company directly from one of the founders for a price of $30 per share. Silva has 1,200,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $750,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $2,000,000 for the year. Ferguson uses the equity method in accounting for its investmentin Silva.a. Provide the Ferguson Company journal entries for the transactions involving its investment in Silva Company during Year 1.b. Determine the December 31, Year 1, balance of the investment in Silva Company stock account.
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S61.350.
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Chapter 15 Solutions
Financial Accounting
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