GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter A, Problem 8P
Recording Investments for Significant Influence
LO A-3 Below are selected T-accounts for William Company.
| Investments In Affiliates | |||
| 1/1 | 56,432 | ||
| Purchase | 15,685 | ||
| Share of | Share of | ||
| affiliate net | affiliate | ||
| income | ? | 8,564 | dividends |
| 12/31 | 67,450 | ||
| Equity In Affiliate Earnings | ||
| 0 ? |
1/1 Share of affiliate net income |
|
| 3,897 | 12/31 | |
Required:
Complete the following journal entries and answer the following questions:
- a. Purchased additional investments in affiliated companies for cash. Prepare the
journal entry . - b. Received cash dividends on the investments. Prepare the journal entry.
- c. At year-end, the investments in affiliates account had a fair value of $62,000; the affiliate also reported $8,120 in net income for the year. Prepare the
adjusting entry. - d. What would be reported on the
balance sheet related to the investments in affiliates on December 31? - e. What would be reported on the income statement for the year?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Please avoid image based answers thnx
Watts and Lyon are forming a partnership. Watts invests $40,500 and Lyon invests $49,500. The partners agree that Watts will work
one-fourth of the total time devoted to the partnership and Lyon will work three-fourths. They have discussed the following alternative
plans for sharing income and loss: (a) in the ratio of their initial capital investments; (b) in proportion to the time devoted to the
business; (c) a salary allowance of $15,000 per year to Lyon and the remaining balance in accordance with the ratio of their initial
capital investments; or (d) a salary allowance of $15,000 per year to Lyon, 11% interest on their initial capital investments, and the
remaining balance shared equally. The partners expect the business to perform as follows: Year 1, $13,000 net loss; Year 2, $32,500
net income; and Year 3, $54,167 net income.
Required:
Complete the tables, one for each of the first three years, by showing how to allocate partnership income or loss to the partners under
each of…
In column A, identify the account to which element it belongs whether Current Asset (CA), Noncurrent Assets (NCA), Current Liabilities (CL), Noncurrent liabilities (NCL) or Shareholders’ equity (SHE). In column B, indicate the line item to which the account belongs. Column A Column B1. Share Capital2. Accounts Payable 3. Plant Expansion Fund4. Trading Securities 5. Employees income tax payable6. Goodwill 7. Raw Materials8. Share Premium 9. Advances from customers
10. Serial bonds not collectible currently 11. Investment in Bonds 12. Notes Payable 13. Prepaid Insurance 14. Income Tax Payable 15. Land
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
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
- What is prefences share captial? What is the journal entries mean?arrow_forwardsiness Accounting Q&A Library On January 1, 2030, A, B and C formed ABC Partnership with original capital contribution of P600,000, P1,100,000 and P400,000. A is appointed as managing partner. During 2030, A, B and C made additional investments of P1,000,000, P400,000 and P600,000, respectively. At the end of 2030, A, B and C made drawings of P400,000, P200,000 and P800,000, respectively. At the end of 2030, the capital balance of C is reported at P640,000. The profit or loss agreement of the partners is provided below: • 10% interest on original capital contribution of the partners. • Quarterly salary of P80,000 and P20,000 for A and B, respectively. • Bonus to A equivalent to 20% of Net Income after interest and salary to all partners • Remainder is to be distributed equally among the partners 14. What is the capital balance of B on December 31, 2030? On January 1, 2030, A, B and C formed ABC Partnership with original capital contribution of P600,000, P1,100,000 and P400,000. A…arrow_forwardHelp mearrow_forward
- QUESTION THREE REQUIRED Use the information provided below to prepare the Statement of Changes in Equity of Sooraya Enterprises/Partnership for the year ended 28 February 2022. INFORMATION Extract from the ledger of Sooraya Enterprises on 28 February 2022 Capital: Soo Capital: Raya Current a/c: Soo (01 March 2021) Current a/c: Raya (01 March 2021) PARTNERSHIPS Drawings: Soo Drawings: Raya R 450 000 350 000 30 000 CR 25000 DR 220 000 (20MARKS) 260 000 The following must be taken into account: 1. On 28 February 2022 the Profit and Loss account reflected a net profit of R 880 000. 2. Partners are entitled to interest at 12% p.a. on their capital balances. Note: Soo increased her capital contribution by R180 000 on 01 September 2021. The capital increase has been recorded. 3. The partners are entitled to the following monthly salaries for the first 6 months of the financial year: Soo R15 000 Raya R11 000 From 01 September 2021, the partners will be entitled to annual salaries of R144 000…arrow_forwardPrepare income statement for this questionarrow_forwardWhen using the equity method of accounting, when is revenue recorded on the books of the investor company?a. When the fair value of the affiliate stock increases.b. When a dividend is received from the affiliate.c. When the affiliate company reports net income.d. Both b and c above.arrow_forward
- Make an journal entry and income summaryarrow_forwardDo not give answer in imagearrow_forwardThe following information relates to partner for the year ended 29 February 2020: Current account credit balance on 29 February 2020 20 000 Profit share 50 000 Salaries 180 000 Interest on capital 24 000 Drawings 220 000 Interest on drawings 2 000 What is the balance in the Current account of the partner on 01 March 2019? OA. R12 000 DR. B. R116 00O DR OC. R52 000 CR D. R12 000 CR S Type here to searcharrow_forward
- Plz solve!!!!arrow_forwardWhich of the following is the correct matching concerning the appropriate accounting for long-term stock investments? % of Investor Ownership Accounting Guidelines Between 20% - 50% Consolidated financial statements Less than 20% Cost method More than 50% Cost or equity method Between 20% - 50% Cost methodarrow_forwardQ1 According to IAS 28, Investments in Associates and Joint Ventures, an investment classified as a joint venture should be equity accounted in the consolidated financial statements of the investor company. Which statement below can be used to describe the Equity accounting method? Select one: a. It is an accounting method whereby an investment is initially recorded at cost and is subsequently adjusted for post-acquisition changes in the investor’s share of the net assets of the investee. b. It is an accounting method whereby an investment is initially recorded at cost and is subsequently adjusted for amortization over an agreed period of time. c. It is an accounting method whereby an investment is initially recorded at fair value and is subsequently adjusted for post-acquisition changes in the investor’s share of the net assets of the investee. d. It is an accounting method whereby an investment is initially recorded at fair value and is subsequently adjusted for amortization over…arrow_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:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning- Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
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
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Financial instruments products; Author: fi-compass;https://www.youtube.com/watch?v=gvxozM3TUIg;License: Standard Youtube License