Horngren's Accounting: The Managerial Chapters (12th Edition) (loose Leaf Version)
12th Edition
ISBN: 9780134486826
Author: MILLER-NOBLES, Tracie L.; Mattison, Brenda L.; Matsumura, Ella Mae
Publisher: PEARSON
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Textbook Question
Chapter 15, Problem E15.12E
Accounting for equity investments
Learning Objective 3, 4
Strategic Investments completed the following investment transactions during 2018:
Jan. 14 Purchased 800 shares of Phyflexon stock, paying $50 per share. The Investment represents 4% ownership in Phyflexon's voting stock. Strategic does not have significant influence over Phyflexon. Strategic intends to hold the investment for the indefinite future.
Aug. 22 Received a cash dividend of $0.24 per share on the Phyflexon stock.
Dec. 31 Adjusted the Investment to its current market Value of 545 per share.
31 Phyflexon reported net income of 5330,000 for the year ended 2018.
Requirements
- Journalize Strategic's investment transactions. Explanations are not required.
- Classify and prepare a partial
balance sheet for Strategic's Phyflexon investment as of December 31, 2018. - Prepare a partial income statement for Strategic Investments for year ended December 31, 2018.
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Chapter 15
McDaniel Corporation manufactures surveying equipment. Journalize the entries to record the following selected equity investment
transactions completed by McDaniel during 2019:
February 26
Purchased for cash 1,350 shares of Demon Inc. stock for $70 per share plus a $75 brokerage commission.
April 16
Received dividends of $0.75 per share on Demon Inc. stock.
June 18
Purchased 600 shares of Demon Inc. stock for $68 per share plus a $50 brokerage fee.
August 19
Sold 1,500 shares of Demon Inc. stock for $72 per share less a $100 brokerage commission. McDaniel assumes that
the first investments purchased are the first investments sold.
November 14
Received dividends of $0.44 per share on Demon Inc. stock.
Journalizing equity investment transactions; fair value method
Seamus Industries Inc. buys and sells investments as part of its ongoing cash management. The following
investment transactions were completed during the year:
Feb. 24. Purchased 1,000 shares of Tett Co.'s common stock for $85 per share.
May 16. Purchased 2,500 shares of Isaacson Co.'s common stock for $35.
July 14. Sold 400 shares of Tett Co. stock for $102 per share.
Aug. 12. Sold 750 shares of Isaacson Co. stock for $32 per share.
Oct. 31. Received dividends of $0.40 per share on Tett Co. stock.
Dec. 31. At the end of the accounting period, the fair value of the remaining 600 shares of Tett Co.'s stock
was $110 per share. The fair value of the remaining 1,750 shares of Isaacson Co.'s stock was $30
per share.
Journalize the entries for these transactions. If an amount box does not require an entry, leave it blank.
Feb. 24
May 16
July 14
Aug. 12
Oct. 31
Dec. 31
Chapter 15 Solutions
Horngren's Accounting: The Managerial Chapters (12th Edition) (loose Leaf Version)
Ch. 15 - Prob. 1QCCh. 15 - Which of the following investments is most likely...Ch. 15 - Prob. 3QCCh. 15 - A company invested $45,000 in Yale Co. stock. The...Ch. 15 - Prob. 5QCCh. 15 - Prob. 6QCCh. 15 - Prob. 7QCCh. 15 - Prob. 8QCCh. 15 - Prob. 9QCCh. 15 - Prob. 10QC
Ch. 15 - Prob. 1RQCh. 15 - Prob. 2RQCh. 15 - Prob. 3RQCh. 15 - Prob. 4RQCh. 15 - Prob. 5RQCh. 15 - Prob. 6RQCh. 15 - Prob. 7RQCh. 15 - Prob. 8RQCh. 15 - Prob. 9RQCh. 15 - Prob. 10RQCh. 15 - Prob. 11RQCh. 15 - Prob. 12RQCh. 15 - Prob. 13RQCh. 15 - Prob. 14RQCh. 15 - Prob. S15.1SECh. 15 - Prob. S15.2SECh. 15 - Prob. S15.3SECh. 15 - Prob. S15.4SECh. 15 - Prob. S15.5SECh. 15 - Prob. S15.6SECh. 15 - Prob. S15.7SECh. 15 - Accounting for debt investments Learning Objective...Ch. 15 - Prob. E15.9ECh. 15 - Prob. E15.10ECh. 15 - Prob. E15.11ECh. 15 - Accounting for equity investments Learning...Ch. 15 - Prob. E15.13ECh. 15 - Prob. E15.14ECh. 15 - Prob. E15.15ECh. 15 - Prob. E15.16ECh. 15 - Prob. E15.17ECh. 15 - Prob. P15.18APGACh. 15 - Prob. P15.19APGACh. 15 - Prob. P15.20APGACh. 15 - Accounting for debt investments Learning Objective...Ch. 15 - Prob. P15.22BPGBCh. 15 - Prob. P15.23BPGBCh. 15 - Prob. P15.24CTCh. 15 - Prob. 25CPCh. 15 - Prob. 15.1TIATCCh. 15 - Prob. 15.1DCCh. 15 - Prob. 15.1EICh. 15 - Prob. 15.1FCCh. 15 - Prob. 15.1FSC
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