GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
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Chapter A, Problem 7MCQ
To determine
Find the correct option, the option which denotes the amounts to be reported by Company BO, on the
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Selk Steel Company, which began operations in Year 1, had the following transactions and events in its long-term
investments.
Year 1
January 5 Selk purchased 60,000 shares (20% of total) of Kildaire's common stock for $1,560,000.
October 23 Kildaire declared and paid a cash dividend of $3.20 per share.
December 31 Kildaire's net income for the year is $1,164,000, and the fair value of its stock at December 31 is $30.00
per share.
Year 2
October 15 Kildaire declared and paid a cash dividend of $2.60 per share.
December 31 Kildaire's net income for the year is $1,476,000, and the fair value of its stock at December 31 is $32.00
per share.
Year 3
January 2 Selk sold 3% (equal to 1,800 shares) of its investment in Kildaire for $54,200 cash.
Cosmos Corporation had the following long-term investment transactions.
Year 1
January 2
Purchased 5,000 shares of Visual, Inc. for $42 per share.
October 15
Received Visual, Inc. cash dividend of $2 per share.
December 31
Visual reported a net loss of $66,000 for the year.
Year 2
February 2
Sold 5% of the shares of Visual Inc for $7000.
Prepare the journal entries Cosmos Corporation should record for these transactions and events.
Selk Steel Company, which began operations in Year 1, had the following transactions and events in its long-term investments.Year 1
January 5
Selk purchased 40,000 shares (20% of total) of Kildaire's common stock for $1,400,000.
October 23
Kildaire declared and paid a cash dividend of $3.80 per share.
December 31
Kildaire’s net income for the year is $1,170,000, and the fair value of its stock at December 31 is $42 per share.
Year 2
October 15
Kildaire declared and paid a cash dividend of $2.70 per share.
December 31
Kildaire’s net income for the year is $1,181,000, and the fair value of its stock at December 31 is $46 per share.
Year 3
January 2
Selk sold 2% (equal to 800 shares) of its investment in Kildaire for $67,400 cash.
Assume that although Selk owns 20% of Kildaire’s outstanding stock, circumstances indicate that it does not have a significant influence over the investee.Required:Prepare journal entries to record the preceding transactions and events…
Chapter A Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. A - Prob. 1QCh. A - Explain the difference in accounting methods used...Ch. A - Explain how bonds held to maturity are reported on...Ch. A - Explain the application of the cost principle to...Ch. A - Under the fair value method, when and how does the...Ch. A - Under the equity method, why does the investor...Ch. A - Prob. 7QCh. A - Prob. 8QCh. A - Prob. 9QCh. A - Company X owns 40 percent of Company Y and...
Ch. A - Prob. 2MCQCh. A - Dividends received from stock that is reported as...Ch. A - Prob. 4MCQCh. A - Prob. 5MCQCh. A - When using the equity method of accounting, when...Ch. A - Prob. 7MCQCh. A - Prob. 8MCQCh. A - Which of the following is true regarding the...Ch. A - Prob. 10MCQCh. A - Matching Measurement and Reporting Methods Match...Ch. A - Prob. 2MECh. A - Prob. 3MECh. A - Prob. 4MECh. A - Prob. 5MECh. A - Prob. 6MECh. A - Prob. 7MECh. A - Prob. 8MECh. A - Prob. 9MECh. A - Prob. 10MECh. A - Prob. 11MECh. A - Prob. 1ECh. A - Prob. 2ECh. A - Recording Transactions in the Available-for-Sale...Ch. A - Prob. 4ECh. A - Prob. 5ECh. A - Reporting Gains and Losses in the Trading...Ch. A - Prob. 7ECh. A - Prob. 8ECh. A - Prob. 9ECh. A - Prob. 10ECh. A - Prob. 11ECh. A - Prob. 1PCh. A - Prob. 2PCh. A - Prob. 3PCh. A - Prob. 4PCh. A - Prob. 5PCh. A - Comparing Methods to Account for Various Levels of...Ch. A - Prob. 7PCh. A - Recording Investments for Significant Influence LO...Ch. A - Prob. 9PCh. A - Prob. 10PCh. A - Prob. 11PCh. A - Prob. 1APCh. A - Prob. 2APCh. A - Reporting Passive Investments During January 2017,...Ch. A - Prob. 4APCh. A - Prob. 5APCh. A - Prob. 6APCh. A - Prob. 1CONCh. A - Finding Financial Information Refer to the...Ch. A - Prob. 2CPCh. A - Prob. 3CPCh. A - Prob. 4CPCh. A - Prob. 5CPCh. A - Prob. 6CP
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