ADVANCED FIN. ACCT. LL W/ACCESS>CUSTOM<
12th Edition
ISBN: 9781265074623
Author: Christensen
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 5, Problem 5.21.2P
Multiple-Choice Questions on Applying the Equity Method [AICPA Adapted]
Select the correct answer for each the following questions.
2. On January 1, 20X3, Miller Company purchased 25 percent of Wall Corporation’s commonstock; no differential resulted from the purchase. Miller appropriately uses the equity methodfor this investment, and the balance in Miller’s investment account was $190,000 on December31, 20X3. Wall reported net income of $120,000 for the year ended December 31, 20X3, and paid dividends on its common stock totaling $48,000 during 20X3. How much did Miller pay for its 25 percent interest in Wall?
a. $172,000
b. $202,000
c. $208,000
d. $232,000
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Garrett Manufacturing owns 10% of the common stock of Timberline Corporation and used the fair-value method to account for this investment. Timberline reported a net income of $110,000 for 20X2 and paid dividends of $50,000 on October 1, 20X2.How much income should Garrett recognize on this investment in 20X2?
Group of answer choices
$50,000
$16,500
$25,500
$7,500
$5,000
Z Corporation has the following transactions relating to its investment during 2020:
Jan 5 Acquired 16,000 shares of Y company for P1,500,000 paying an additional P10,000 for brokerage and P5,000 for commission.
Feb 14 Received dividends from Y company declared January 10,2020 to the stockholders of records January 31,2020, P16,000.
Required:prepare all the necessary entries assuming the investment is
1. Financial asset at Fair Value through profit and loss
2. Financial asset at Fair Value through other comprehensive income
Entity A acquired an investment in associate
for P1M many years ago. At the end of the
current reporting period, the investment
has a fair value of P2.9M. If the equity
method is used, the investment would have
a current carrying amount of P2.6M. In
Entity A's separate financial statements, the
investment should be valued at
O 1,000,000.
O 2,600,000.
O 2,900,000.
any of these, as a matter of an accounting
policy choice
Chapter 5 Solutions
ADVANCED FIN. ACCT. LL W/ACCESS>CUSTOM<
Ch. 5 - Where is the balance assigned to the...Ch. 5 - Why must a noncontrolling interest be reported in...Ch. 5 - Prob. 5.3QCh. 5 - Prob. 5.4QCh. 5 - Prob. 5.5QCh. 5 - Prob. 5.6QCh. 5 - Prob. 5.7QCh. 5 - Prob. 5.8QCh. 5 - Prob. 5.9QCh. 5 - Prob. 5.10Q
Ch. 5 - Under what Circumstances would a parent company...Ch. 5 - Prob. 5.12QCh. 5 - Prob. 5.13QCh. 5 - Prob. 5.14AQCh. 5 - Prob. 5.15AQCh. 5 - Consolidation Worksheet Preparation The newest...Ch. 5 - Prob. 5.2CCh. 5 - Prob. 5.3CCh. 5 - Prob. 5.4CCh. 5 - Prob. 5.5CCh. 5 - Prob. 5.1.1ECh. 5 - Prob. 5.1.2ECh. 5 - Prob. 5.1.3ECh. 5 - Prob. 5.1.4ECh. 5 - Prob. 5.2.1ECh. 5 - Prob. 5.2.2ECh. 5 - Prob. 5.2.3ECh. 5 - Prob. 5.2.4ECh. 5 - Prob. 5.2.5ECh. 5 - Prob. 5.3ECh. 5 - Prob. 5.4ECh. 5 - Balance Sheet Worksheet Problem Company owns 90...Ch. 5 - Prob. 5.6ECh. 5 - Prob. 5.7ECh. 5 - Prob. 5.8.1ECh. 5 - Prob. 5.8.2ECh. 5 - Prob. 5.8.3ECh. 5 - Prob. 5.8.4ECh. 5 - Prob. 5.8.5ECh. 5 - Prob. 5.8.6ECh. 5 - Prob. 5.8.7ECh. 5 - Prob. 5.9ECh. 5 - Prob. 5.10ECh. 5 - Prob. 5.11ECh. 5 - Prob. 5.12ECh. 5 - Prob. 5.13ECh. 5 - Prob. 5.14ECh. 5 - Prob. 5.15ECh. 5 - Prob. 5.16ECh. 5 - Prob. 5.17AECh. 5 - Prob. 5.18AECh. 5 - Prob. 5.19PCh. 5 - Prob. 5.20PCh. 5 - Prob. 5.21.1PCh. 5 - Multiple-Choice Questions on Applying the Equity...Ch. 5 - Prob. 5.21.3PCh. 5 - Prob. 5.21.4PCh. 5 - Prob. 5.22PCh. 5 - Computation of Account Balances Pencil Company...Ch. 5 - Prob. 5.24PCh. 5 - Equity Entries with Differential On January 1,...Ch. 5 - Equity Entries with Differential Plug Corporation...Ch. 5 - Prob. 5.27PCh. 5 - Prob. 5.28PCh. 5 - Prob. 5.29P
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
- answer in text form please (without image)arrow_forward47.ABC Corp acquired 30,000 shares of XYZ Co. The shares were actively traded in the three markets. The following data were made available: PSE Nikkei NYSEMarket Price 100 105 102Transaction Cost 4 10 5Transport costs 5 10 20ABC Corp normally buys and sells XYZ's shares in PSE and designate them as investment held for FVOCI. The entry to record the acquisition would include: Dr. Investment in equity securities- FVOCI, P2,850,000 Dr Investment in debt equity - FVOCI P2,850,000 Dr Investment in equity security - FVOCI P2,970,000 Dr. Investment in debt equity- FVOCI P3,120,000arrow_forwardAPPLES Corporation bought 2,000 shares of Oranges Corporation on January 2, 2023 at ₽150 per share and paid₽ 2,250 as brokerage fee and ₽ 1,500 non-refundable tax. The investment is measured at fair value through othercomprehensive income. Prior to the date of acquisition, information revealed that on December 8, 2022, Oranges Corporation declared a ₽10 cash dividend to shareholders on record as of January 31, 2023 payable on April 30, 2023. There were no other transactions in 2023 affecting the investment in Oranges Corporation. What is the historical or acquisition cost of the investment account?A. ₽ 283,750B. ₽ 300,000C. ₽ 302,250D. ₽ 0303.750arrow_forward
- Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardplease answer in text form and in proper format answer with must explanation , calculation for each part and steps clearlyarrow_forwardTopic: Investment Provide all necessary entries and Financial Statements.arrow_forward
- please make sure you are using the values in this question because they are differerentarrow_forwardUse the following information for question 1 CPA Corporation purchased a 10% interest in Sticky Company on January 1, 2010 as an available-for-sale investment for a price of P120,00. On January 1, 2015, CPA Corporation purchases 7,000 additional shares of Sticky Company from existing stockholders for P945,000. This purchase increased CPA interest to 70%. Sticky Company had the following statement financial position just prior to CPA second purchases: Assets Liabilities and Equity Current assets Building (net) 300,000 Equipment (net) Liabilities Common stock, P30 par 495,000 195,000 420,000 300,000 Retained earnings 720,000 Total assets 1,215,000 Total liabilities and equity 1,215,000 On the date of the second purchase, CPA determines that the equipment of Sticky was understated by P150,000 and had a 5-year remaining life. All other book values approximate fair values. Any remaining excess is attributed to goodwill. 1. On January 1, 2015 consolidated statement of financial positon, what…arrow_forwardOn January 3, 2018,A Corp. purchased 25% of the voting common stock or C0.paying S2,500,000. A Cop. decided to use the equity method to account for this investment. Atthe ime of the investment, G Co, total stockholders' equity was S8,000,000. ACOIp. gathered the following intormation about G Co. assets and liabiiines Fair Value $500,000 1.300,0 00 0,000 Book Value S400,000 1.000,000 Buildings (10-year life) Equipment (5-year lite) Franchises (8-year life) For all other assets and liabilities, book value and fair vaue were equal. Any excess of cost over tair value was attributed to goodwill, which has not been impaired.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial instruments products; Author: fi-compass;https://www.youtube.com/watch?v=gvxozM3TUIg;License: Standard Youtube License