Connect Access Card for Financial Accounting
9th Edition
ISBN: 9781259738678
Author: Robert Libby, Patricia Libby, Frank Hodge Ch
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter A, Problem 7P
1.
To determine
Indicate the method used by Company C to account the investment in Corporation S under Case A and Case B.
2.
a.
To determine
Journalize the purchase of investment in Company C stock for Case A and Case B.
b.
To determine
Journalize the income reported by Corporation S, for Case A and Case B.
c.
To determine
Journalize the dividends paid by Corporation S, for Case A and Case B.
d.
To determine
Journalize the
3.
a.
To determine
Show the amounts related to investments, reported on the
b.
To determine
Show the amounts related to investments, reported on the statement of
c.
To determine
Show the revenue related to investments, reported on the income statement of Company C.
4.
To determine
Explain the reasons for the differences between the Case A and Case B investments.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
. Journal entries using the Cost and Equity Method of accounting for the
for the following transtation :
On 1/2/18 the Xylo Corp. purchased 8000 shares of ABC Co. Common Stock
At $20 per share. ABC Co. has 40000 shares of Common Stock outstanding.
On 10/31/18 Xylo Corp. received a $1.50 per share dividend from ABC Co.
On 12/30/18 ABC Company announced earnings of for the year at $200000.
Prepare the calculations and Journal Entries, in good form, if the
Investment is classified as Available for sale Part A. The Cost Method.
Part B The Equity Method of accounting is applicable.
On November 1 of Year 1, Drucker Co. acquired the following investments in equity securities measured at FV-NI.
Kelly Corporation 400 shares of common stock (no-par) at $60 per share
Keefe Corporation 240 shares preferred stock ($10 par) at $20 per share
On December 31, the company's year-end, the quoted market prices were as follows: Kelly Corporation common stock, $52, and Keefe Corporation preferred stock, $24.
Following are the data for the following year (Year 2).
Mar. 02: Dividends per share, declared and paid: Kelly Corp., $1, and Keefe Corp., $0.50.
Oct. 01: Sold 80 shares of Keefe Corporation preferred stock at $25 per share.
Dec. 31: Fair values: Kelly common, $46 per share, Keefe preferred, $26 per share.
Year 1
Year 2
d. Prepare the entries required in Year 2 to record dividend revenue, the sale of stock, and the fair value adjustment. Assume that the Fair Value Adjustment account needs to be adjusted for the investment portfolio on
December 31, Year 2.
Date
Mar. 2, Year 2…
nts
CFAS Company showed the following information from its shareholders' equity at year-end before the effect
of the transaction below:
Ordinary share capital
P6,250,000
Share premium
3,125,000
Retained earnings
3,724,000
Treasury shares (at cost)
1,530,000
The ordinary shares were originally issued for P187.50 per share. At the end of the year, CFAS Company
retired 5,100 shares held in treasury. The treasury shares had a P125 par value per share and an average cost
per share of P300. (Input your answers as figures, do NOT put any comma, peso sign or extra spaces. E.g. if your
answer is one thousand, please input 1000):
1. How much is the adjusted ordinary share capital at year end?
2. How much is the adjusted share premium at year end?
3. How much is the adjusted balance of retained earnings at year end?
Chapter A Solutions
Connect Access Card for Financial Accounting
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
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
- No. 19arrow_forwardNot a graded assignmentarrow_forwardA company acquired 97,000 shares of its common stock at a price of $26 per share and accounted for them by the cost method. Par value per share is $8. Subsequently, these shares were reissued at a price of $17 per share. Paid-in Capital from T/S prior to the resale has a balance of $17,000. The resale of the stock decreases retained earnings by _______________. (If the resale does not affect retained earnings, then enter 0)arrow_forward
- On January 10, 2012 Badger Co. purchased 30% of the outstanding stock of Crest Co. for $123,000. Crest paid total dividends to all shareholders of $15,000 on July 15. crest had a net loss of $25,000 for 2012 a. Journalize Badger’s purchase of the stock, receipt of dividend and adjusting entry for the equity loss in Crest Co. Stock. b. Compute the balance of investment in Crest CO. Stock for December 31, 2012.arrow_forward(a) On September 30, 2002, Buffer Co made an issue at full market price of 1,000,000 accounting year runs from January 1 to December 31. Relevant information for 2001 and 2002 is as follows: ordinary shares. The company's 2002 2001 Shares in issue as at 31 December 9,000,000 8,000,000 Profits after tax and preferred dividend $3,300,000 $3,280,000 Required: calculate the EPS for 2002 and the corresponding figures for 2001arrow_forwardAs of the end of Year 1, the shareholders’ equity of Philip Corporation consisted of: Common stock, 80,100 shares at $1 par $ 80,100 Paid-in capital—excess of par 168,210 Retained earnings 121,000 At the beginning of Year 2, the company repurchased and retired 1,100 shares at $8.10 per share. Prepare the appropriate journal entry for the repurchase and retirement of the shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account fieldarrow_forward
- Investments in Stocks--Equity Method or FVTOCI Financial Assets--Equity According to the statements, prepare the appropriate journał entries, and calculate the differences.. Tony Ltd. acquired 30% of the outstanding ordinary shares of Chang Company on January 1, 2018, by paying $900,000 for the 90,000 shares. Chang declared and paid $0.15 per share cash dividends on March 15, June 15, September 15, and December 15, 2018. Chang reported net income of $160,000 for the year. At December 31, 2018, the market price of Chang ordinary shares was $12 per share. Required: 1. Prepare the journal entries for Tony Ltd. for 2018, assuming Tony Ltd. cannot exercise significant influence over Chang, and Tony Ltd. made an irrevocable election to treat the equity investment as fair value through other comprehensive income. 2.: Prepare the journal entries for Tony Ltd. for 2018, assuming Tony Ltd. can exercise significant influence over Chang. Tadicate the statement of financial position and income…arrow_forwardCan you please help me solve this question?arrow_forwardWaterway Corporation began business by issuing 649600 shares of $5 par value common stock for $25 per share. During its first year, the corporation sustained a net loss of $62300. The year-end balance sheet would show Common stock of $3248000. Common stock of $16240000. Total paid-in capital of $12992000. Total paid-in capital of $16177700.arrow_forward
- On August 1 2018, Sea Food Co., purchased 80% of the common stock of Dolphin Co.,. The common stock issue 70,000 shares of its (Sea Food) OMR 25 par value. Common stock market price of OMR 30 per share. Calculate the investment of Dolphin Co., Select one: a. 1,750,000 b. 2,100,000 c. 1,400,000 d. 1,680,000arrow_forwardplease prepare the journal entries Q1. Sold 22,500 Treasury shares at $2 each. Q2. Purchased 10% shareholding in Charlie Limited, a supplier, as a long-term investment. The fair value of the 10% shareholding was $2,900,000 as at 1 March. The purchase consideration included a $2,700,000 note receivable due from Charlie Limited and the related interest receivable balance of $144,000, $140,000 cash and a motor vehicle owned by ITI. The motor vehicle was originally obtained at $120,000. ( for depreciation details, refer to Q1 of additional information.) Q3. A 10% share dividend was declared when the market value per share was $2.1. Q4. Paid cash to acquired 30,000 shares of its own at $2.3 each. ITI intends to keep the shares for several months for management bonus.arrow_forwardSubject: acountingarrow_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
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher: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