Investment: To get the financial benefits, money spent or invested is known as investment. The benefits can be in the form of dividend, interest, and rental income. Shares: A share is the ownership certificate of the company. A share is that part of company’s capital which cannot further divide. Shares define the right to vote and right of participation in the profit of the company. Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts. Accounting rules for journal entries: To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains. To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains. To prepare: (a) The journal entries in the books of Company E, (b) The journal entries in the books of Company W.

Question

Want to see the full answer?

Answer 1

Question

Chapter 16, Problem 16.2DIE

(a)

To determine

Investment: To get the financial benefits, money spent or invested is known as investment. The benefits can be in the form of dividend, interest, and rental income.

Shares: A share is the ownership certificate of the company. A share is that part of company’s capital which cannot further divide. Shares define the right to vote and right of participation in the profit of the company.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: (a) The journal entries in the books of Company E, (b) The journal entries in the books of Company W.

(b)

To determine

To prepare: The journal entries in the books of Company W.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Find out

The department is most likely responsible to incur a "direct material price variance." A) Production B) Purchasing C) Personnel D) Marketing

Kostelnik Corporation uses a job-order costing system with a single plantwide predetermined overhead rate basd on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $237,000, variable manufacturing overhead of $3.90 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job A496 which was recently completed: Number of units in the job 20 Total machine-hours 80 Direct materials $500 Direct labor cost $2,160 The amount of overhead applied to Job A496 is closest to: (round calculation to 2 decimal places) A) $944 B) $312 C) $1,256 D) $632