ADV.FIN.ACCT. CONNECT+PROCTORIO PLUS
12th Edition
ISBN: 9781266379017
Author: Christensen
Publisher: INTER MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 2, Problem 2.14AE
Income Reporting
Grandview Company purchased 40 percent of the stockof Spinet Corporation on January 1, 20X8, at underlying book value. Spinet recorded the following income for 20X9:
Required
Prepare all
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
On January 2, Todd Company acquired 40% of the outstanding stock of McGuire Company for $205,000. For the year ending December 31, McGuire earned income of $48,000 and
paid dividends of $14,000.
Required:
Journalize the entries for Todd Company for the purchase of the stock, share of McGuire Company income, and dividends received from McGuire Company. If an amount box does not
require an entry, leave it blank.
Jan. 2
Dec. 31
Dec. 31
0000
☐☐☐☐☐☐
Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $146,000. On that date, the fair
value of the noncontrolling interest was $36,500, and Slice reported retained earnings of $44,000 and had $92,000 of common stock
outstanding. Pizza has used the equity method in accounting for its investment in Slice.
Trial balance data for the two companies on December 31, 20X5, are as follows:
Pizza
Slice
Corporation
Debit
$
Products Company
Debit
$ 82,000
109,000
82,000
164,000
Item
Credit
Credit
88,000
277,000
82,000
507,000
176, 200
119,000
20,000
10,000
44,000
Cash & Receivables
Inventory
Land
Buildings & Equipment
Investment in Slice Products Company
Cost of Goods Sold
Depreciation Expense
Inventory Losses
Dividends Declared
44,000
10,000
6,000
22,000
$ 193,000
Accumulated Depreciation
Accounts Payable
Notes Payable
Common Stock
40,000
266,920
285,000
299,000
207,000
32,280
$ 70,000
15,000
155,000
92,000
82,000
105,000
Retained Earnings
Sales
Income…
On January 2, Todd Company acquired 40% of the outstanding stock of McGuire Company for $205,000. For the year ending
December 31, McGuire earned income of $48,000 and paid dividends of $14,000.
Required:
Journalize the entries for Todd Company for the purchase of the stock, share of McGuire Company income, and dividends received
from McGuire Company. If an amount box does not require an entry, leave it blank.
Chapter 2 Solutions
ADV.FIN.ACCT. CONNECT+PROCTORIO PLUS
Ch. 2 - What types of investments in common stock normally...Ch. 2 - Prob. 2.2QCh. 2 - Describe an investor’s treatment of an investment...Ch. 2 - How is the receipt of a dividend recorded under...Ch. 2 - How does carrying securities at fair value...Ch. 2 - Prob. 2.6QCh. 2 - Prob. 2.7QCh. 2 - Prob. 2.8QCh. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - How are a subsidiary’s dividend declarations...Ch. 2 - Prob. 2.12QCh. 2 - Give a definition of consolidated retained...Ch. 2 - Prob. 2.14QCh. 2 - Prob. 2.15QCh. 2 - Prob. 2.16AQCh. 2 - When is equity method reporting considered...Ch. 2 - How does the fully adjusted equity method differ...Ch. 2 - What is the modified equity method? When might a...Ch. 2 - Choice of Accounting Method Slanted Building...Ch. 2 - Prob. 2.2CCh. 2 - Prob. 2.3CCh. 2 - Prob. 2.4CCh. 2 - Prob. 2.5CCh. 2 - Prob. 2.6CCh. 2 - Prob. 2.1.1ECh. 2 - Multiple-Choice Questions on Accounting for Equity...Ch. 2 - Prob. 2.1.3ECh. 2 - Prob. 2.1.4ECh. 2 - Multiple-Choice Questions on Intercorporate...Ch. 2 - Prob. 2.2.2ECh. 2 - Prob. 2.3.1ECh. 2 - Prob. 2.3.2ECh. 2 - Prob. 2.3.3ECh. 2 - Prob. 2.4ECh. 2 - Acquisition Price Phillips Company bought 40...Ch. 2 - Prob. 2.6ECh. 2 - Prob. 2.7ECh. 2 - Carrying an investment at Fair Value versus Equity...Ch. 2 - Carrying an Investment at Fair Value versus Equity...Ch. 2 - Prob. 2.10ECh. 2 - Prob. 2.11ECh. 2 - Prob. 2.12ECh. 2 - Prob. 2.13ECh. 2 - Income Reporting Grandview Company purchased 40...Ch. 2 - Investee with Preferred Stock Outstanding Reden...Ch. 2 - Prob. 2.16AECh. 2 - Prob. 2.17AECh. 2 - Changes ¡n the Number of Shares Held Idle...Ch. 2 - Investments Carried at Fair Value and Equity...Ch. 2 - Carried at Fair Value Journal Entries Marlow...Ch. 2 - Consolidated Worksheet at End of the First Year of...Ch. 2 - Consolidated Worksheet at End of the Second Year...Ch. 2 - Prob. 2.23PCh. 2 - Prob. 2.24PCh. 2 - Prob. 2.25APCh. 2 - Equity-Method income Statement Wealthy...Ch. 2 - Prob. 2.27BPCh. 2 - Prob. 2.28BP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Can you please help me with part Aarrow_forwardi need the answer quicklyarrow_forward1. Magaro Inc. purchases 35% of Deseo corporation for P 600,000. At the end of the year, Deseo corporation reported a net income of 300,000 and a dividend of 50,000 to its shareholders. Prepare journal entry for investment, dividends and net income of Magaro Inc.arrow_forward
- Required information [The following information applies to the questions displayed below.) Felicia Company acquired 22.000 of the 55,000 shares of outstanding common stock of Nueces Corporation as a long term investment. The annual accounting period for both companies ends December 31. The following transactions occurred during the year: Jan. 10 Purchased 22,000 shares of Nueces common stock at $14 per share. Dec. 31 Nueces Corporation reported net income of $104,000. Dec. 31 Nueces Corporation declared and paid a cash dividend of $0.70 per share. Dec. 31 Determined the fair value of Nueces stock to be $13 per share. 3. Show how the long-term investment and the related revenue should be reported on the financial statements of Felicia Company Balance Sheet FELICIA COMPANY Long-term Investments: Income Statementarrow_forwarddon't give answer in image formatarrow_forwardFoc Don't upload any image pleasearrow_forward
- Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $287,100 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $319,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, follow: Peanut Company Snoopy Company Cash Accounts Receivable Inventory Debit $ 163,000 Credit 173,000 209,000 Debit $ 87,000 67,000 93,000 Credit Investment in Snoopy Company Land Buildings and Equipment. 342,000 205,000 714,000 93,000 192,000 Cost of Goods Sold 193,000 113,000 Depreciation Expense 42,000 10,000 selling & Administrative Expense 205,000 Dividends Declared 99,000 Accumulated Depreciation $ 443,000 Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Snoopy Company Total 32,000 22,000 $ 20,000 72,000 57,000 200,000 75,000 493,000 199,000 279,300 120,000 783,000 238,000 74,700 0 $ 2,345,000 $ 2,345,000 $ 709,000 $ 709,000 Required: a. Prepare any…arrow_forwardPrepare Journal entries?arrow_forwardSubject- accountingarrow_forward
- Blush Company has the ability to exercise significant when the fair value of net assets was P20,000,000. outstanding ordinary shares of an investee for P4,000,000 On July 1, 2020 Blush Company purchased 20% of the influence over the operating and financial policies of the investee. The following data concerning the investee are available: 12 months ended December 31, 2020 December 31, 2020 6 months ended Net income Dividend declared and paid 3,000,000 1,900,000 1,600,000 1,000,000 in the income statement for the year ended December 31, o020, what amount of income should be reported from the investment?arrow_forwardOn January 2, 20Y4, Destiny Company acquired 42% of the outstanding stock of Emerald Company for $350,000. For the year ended December 31, 20Y4 Destiny Company earned income of $200,000 and paid dividends of $25,000. On January 31, 20Y5, Destiny Company sold all of its investment in Emerald Company stock for $400,000. Journalize the entries for Destiny Company for the purchase of the stock, the share of Emerald income, the dividends received from Emerald Company, and the sale of the Emerald Company stock.arrow_forwardOn January 1, Vienna Corporation purchased 40% of the outstanding common stock of the Marietta Corporation for $137,500. During the year, Marietta Corporation reported net income of $50,000 and paid cash dividends of $25,000.The balance of the Investment in the Marietta Corporation account on the books of Vienna Corporation at year-end is: Select one: A. $147,500 B. $135,000 C. $100,000 D. $110,000arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
The ACCOUNTING EQUATION For BEGINNERS; Author: Accounting Stuff;https://www.youtube.com/watch?v=56xscQ4viWE;License: Standard Youtube License