The journal entries to record the acquisition of the investment in KS.

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Answer 1

Question

Chapter 16, Problem 16.15E

a.

To determine

To prepare: The journal entries to record the acquisition of the investment in KS.

b.

To determine

To prepare: The journal entry to record the receipt of the cash dividends.

c.

To determine

To prepare: The journal entries required to adjust the investment balance to fair value.

d.

To determine

To prepare: An analysis statement comparing the pre-tax income and cash flows related to the investment under the equity method and the fair value method.

e.

To determine

To prepare: An analysis statement comparing the pre-tax income and cash flows related to the investment under the equity method and the fair value method, with an assuming that Douglas sold the investment for $5,000 000 on January 1 of the year after acquisition.

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On August 1, 2012, Simmons Corporation loaned $40,000 to Thompson Inc. for one year at an annual interest rate of 7%. Under the terms of the promissory note, Thompson Inc. will repay the principal and pay one year's interest on August 31, 2013. What would be the total amount of receivable related to this loan on Simmons Corporation's December 31, 2012 balance sheet? (Round your answer nearest Dollar) A) $41,167 B) $26,500 C) $25,750 D) $12,875

Please explain the solution to this general accounting problem with accurate principles.

Answer 2

Question

Chapter 16, Problem 16.15E

a.

To determine

To prepare: The journal entries to record the acquisition of the investment in KS.

b.

To determine

To prepare: The journal entry to record the receipt of the cash dividends.

c.

To determine

To prepare: The journal entries required to adjust the investment balance to fair value.

d.

To determine

To prepare: An analysis statement comparing the pre-tax income and cash flows related to the investment under the equity method and the fair value method.

e.

To determine

To prepare: An analysis statement comparing the pre-tax income and cash flows related to the investment under the equity method and the fair value method, with an assuming that Douglas sold the investment for $5,000 000 on January 1 of the year after acquisition.

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Answer 3

Question

Chapter 16, Problem 16.15E

a.

To determine

To prepare: The journal entries to record the acquisition of the investment in KS.

b.

To determine

To prepare: The journal entry to record the receipt of the cash dividends.

c.

To determine

To prepare: The journal entries required to adjust the investment balance to fair value.

d.

To determine

To prepare: An analysis statement comparing the pre-tax income and cash flows related to the investment under the equity method and the fair value method.

e.

To determine

To prepare: An analysis statement comparing the pre-tax income and cash flows related to the investment under the equity method and the fair value method, with an assuming that Douglas sold the investment for $5,000 000 on January 1 of the year after acquisition.

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Answer 4

Question

Chapter 16, Problem 16.15E

a.

To determine

To prepare: The journal entries to record the acquisition of the investment in KS.

b.

To determine

To prepare: The journal entry to record the receipt of the cash dividends.

c.

To determine

To prepare: The journal entries required to adjust the investment balance to fair value.

d.

To determine

To prepare: An analysis statement comparing the pre-tax income and cash flows related to the investment under the equity method and the fair value method.

e.

To determine

To prepare: An analysis statement comparing the pre-tax income and cash flows related to the investment under the equity method and the fair value method, with an assuming that Douglas sold the investment for $5,000 000 on January 1 of the year after acquisition.

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Answer 5

Chapter 16, Problem 16.15E

a.

To determine

To prepare: The journal entries to record the acquisition of the investment in KS.

b.

To determine

To prepare: The journal entry to record the receipt of the cash dividends.

c.

To determine

To prepare: The journal entries required to adjust the investment balance to fair value.

d.

To determine

To prepare: An analysis statement comparing the pre-tax income and cash flows related to the investment under the equity method and the fair value method.

e.

To determine

To prepare: An analysis statement comparing the pre-tax income and cash flows related to the investment under the equity method and the fair value method, with an assuming that Douglas sold the investment for $5,000 000 on January 1 of the year after acquisition.

Answer 6

Chapter 16, Problem 16.15E

a.

To determine

To prepare: The journal entries to record the acquisition of the investment in KS.

Answer 7

Chapter 16, Problem 16.15E

a.

To determine

To prepare: The journal entries to record the acquisition of the investment in KS.

Answer 8

b.

To determine

To prepare: The journal entry to record the receipt of the cash dividends.

Answer 9

b.

To determine

To prepare: The journal entry to record the receipt of the cash dividends.

Answer 10

c.

To determine

To prepare: The journal entries required to adjust the investment balance to fair value.

Answer 11

c.

To determine

To prepare: The journal entries required to adjust the investment balance to fair value.

Answer 12

d.

To determine

To prepare: An analysis statement comparing the pre-tax income and cash flows related to the investment under the equity method and the fair value method.

Answer 13

d.

To determine

To prepare: An analysis statement comparing the pre-tax income and cash flows related to the investment under the equity method and the fair value method.

Answer 14

e.

To determine

To prepare: An analysis statement comparing the pre-tax income and cash flows related to the investment under the equity method and the fair value method, with an assuming that Douglas sold the investment for $5,000 000 on January 1 of the year after acquisition.

Answer 15

e.

To determine

To prepare: An analysis statement comparing the pre-tax income and cash flows related to the investment under the equity method and the fair value method, with an assuming that Douglas sold the investment for $5,000 000 on January 1 of the year after acquisition.

Answer 16

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Answer 17

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Answer 18

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Answer 19

Ch. 16 - Prob. 16.1Q Ch. 16 - Is reporting an investment at its cost considered...Ch. 16 - Prob. 16.3Q Ch. 16 - Prob. 16.4Q Ch. 16 - Prob. 16.5Q Ch. 16 - Prob. 16.6Q Ch. 16 - What categories can managers use to classify...Ch. 16 - When is the equity method of accounting for...Ch. 16 - Prob. 16.9Q Ch. 16 - Can companies apply the fair value option to all...

The journal entries to record the acquisition of the investment in KS.

Solution Summary: The author explains that journal entry is the primary record of the business transaction in chronological (date wise) order.

To prepare: The journal entries to record the acquisition of the investment in KS.

To prepare: The journal entry to record the receipt of the cash dividends.

To prepare: The journal entries required to adjust the investment balance to fair value.

To prepare: An analysis statement comparing the pre-tax income and cash flows related to the investment under the equity method and the fair value method.

To prepare: An analysis statement comparing the pre-tax income and cash flows related to the investment under the equity method and the fair value method, with an assuming that Douglas sold the investment for $5,000 000 on January 1 of the year after acquisition.

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Chapter 16 Solutions