Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter D, Problem 6E
To determine
Journalize the stock investment transactions for Company Y, under the equity method
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
On January 2, Cohan Company acquired 40% of the outstanding stock of Sanger Company for $677,000. For the year ended December 31, Sanger Company earned income of $149,000 and paid dividends of $27,500.
Prepare the entries for Cohan Company for the purchase of the stock, the share of Sanger income, and the dividends received from Sanger Company. Refer to the Chart of Accounts for exact wording of account titles.
On January 2, Cohan Company acquired 40% of the outstanding stock of Sanger Company for $677,000. For the year ended December 31, Sanger Company earned income of $149,000 and paid dividends of $27,500.
Prepare the entries for Cohan Company for the purchase of the stock, the share of Sanger income, and the dividends received from Sanger Company. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
Cohan Company
General Ledger
ASSETS
110
Cash
111
Petty Cash
120
Accounts Receivable
121
Allowance for Doubtful Accounts
131
Notes Receivable
132
Interest Receivable
141
Merchandise Inventory
145
Office Supplies
161
Investment in Sanger Company Stock
165
Valuation Allowance for Trading Investments
166
Valuation Allowance for Available-for-Sale Investments
181
Land
193
Office Equipment
194
Accumulated Depreciation-Office Equipment
LIABILITIES
210
Accounts Payable
221
Notes Payable
231
Interest…
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.
Prepare the entries for Todd Company for the purchase of the stock, share of McGuire income, and dividends received from McGuire.
Chapter D Solutions
Financial And Managerial Accounting
Ch. D - Prob. 1ECh. D - Prob. 2ECh. D - Starks Products uses the cost method to account...Ch. D - Prob. 4ECh. D - Prob. 5ECh. D - Prob. 6ECh. D - Prob. 7ECh. D - On January 1, 20Y9, Valuation Allowance for...Ch. D - The investments of Charger Inc. include a single...Ch. D - Jets Bancorp Inc. purchased a portfolio of trading...
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
- 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.arrow_forwardOn 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 ☐☐☐☐☐☐arrow_forwardOn January 2, Dundar Mifflin acquired 30% of the outstanding stock of Steve & Company for $105,000. For the year ending, December 31, Steve & Company earned income of $68,000 and paid dividend $16,000. Prepare the entries for Dundar Mifflin for the purchase of the stock, share of Steve & Company income and dividends received from Steve & Company.arrow_forward
- On 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 February 1, Brutus Company purchased 1,000 shares (2% ownership) of Wynne Company common stock for $25 per share. On March 20, Brutus Company sold 200 shares of Wynne stock for $4,700. Brutus received a dividend of $1.20 per share on April 25. On June 15, Marcus sold 300 shares of Wynne stock for $8,500.Prepare the journal entries to record the transactions described above. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit Feb. 1Mar. 20Apr. 25June 15 Feb. 1Mar. 20Apr. 25June 15 Feb. 1Mar. 20Apr. 25June 15 Feb. 1Mar. 20Apr. 25June 15arrow_forwardOn January 2, 20Y4, Whitworth Company acquired 37% of the outstanding stock of Aloof Company for $320,000. For the year ended December 31, 20Y4, Aloof Company earned income of $83,000 and paid dividends of $26,000. On January 31 20Y5, Whitworth Company sold all of its investment in Aloof Company stock for $338,090. Journalize the entries for Whitworth Company for the purchase of the stock, the share of Aloof income, the dividends received from Aloof Company, and the sale of the Aloof Company stock. If an amount box does not require an entry, leave it blank. Jan. 2, 20Y4 - Purchase - Select - - Select - - Select - - Select - Dec. 31, 20Y4 - Income - Select - - Select - - Select - - Select - Dec. 31, 20Y4 - Dividends - Select - - Select - - Select - - Select - Jan. 31, 20Y5 - Sale - Select - - Select - - Select - - Select - - Select - - Select -arrow_forward
- Draft Co. purchased 14,00 shares of Hamburg Corporation's 40,000 shares of common stock on January. 1. This representd 35% of Hamburgs outstanding shares and gave Drafts Co. significant influence over Hamburgs management and operations. On october 11, Hamburg declared and paid cash dividends of $30,000. On December 31, Hamburg reported net income of $125,000 for the year. Prepare the journal entries Draft Co. should record to account for the dividends receieved and the earning reported by Hamburg Corporation.arrow_forwardOn February 22, Stewart Corporation acquired 6,000 shares of the 210,000 outstanding shares of Edwards Co, common stock at $29.80 plus commission charges of $1,200. On June 1, a cash dividend of $1.10 per share was received. On November 12, 2,000 shares were sold at $36 less commission charges of $240.arrow_forwardOn January 2, 20Y4, Whitworth Company acquired 40% of the outstanding stock of Aloof Company for $340,000. For the year ended December 31, 20Y4, Aloof Company earned income of $180,000 and paid dividends of $10,000. On January 31 20Y5, Whitworth Company sold all of its investment in Aloof Company stock for $405,000. Journalize the entries for Whitworth Company for the purchase of the stock, the share of Aloof income, the dividends received from Aloof Company, and the sale of the Aloof Company stock. If an amount box does not require an entry, leave it blank. Jan. 2, 20Y4 - Purchase Dec. 31, 20Y4 - Income Dec. 31, 20Y4 - Dividends Jan. 31, 20Y5 - Salearrow_forward
- On January 1, Sohar Corporation purchased a 25% equity in Salalah Corporation for $120,000. At December 31, Salalah declared and paid a $50,000 cash dividend and reported net income of $250,000. Instructions (a) Journalize the transactions. (b) Determine the amount to be reported as an investment in Salalah stock at December 31.arrow_forwardOn January 1, Lifestyle Pools purchased 30% of Marshall Fence’s common stock for $660,000 cash. By the end of the year, Marshall Fence reported net income of $156,000 and paid dividends of $56,000 to all shareholders.Required:For Lifestyle Pools, record the initial purchase and its share of Marshall Fence’s net income and dividends for the year.arrow_forwardOn January 6, Year 1, Bulldog Co. purchased 29% of the outstanding stock of Gator Co. for $179,000. Gator Co. paid total dividends of $19,700 to all shareholders on June 30. Gator Co. had a net loss of $35,800 Year 1. a. Journalize Bulldog's purchase of the stock, receipt of the dividends, and the adjusting entry for the equity loss in Gator Co. stock. Jan. 6 - Purchase fill in the blank f12e39ffe00ff83_2 fill in the blank f12e39ffe00ff83_4 June 30 - Dividend fill in the blank f12e39ffe00ff83_6 fill in the blank f12e39ffe00ff83_8 Dec. 31 - Equity Loss fill in the blank f12e39ffe00ff83_10 fill in the blank f12e39ffe00ff83_12 b. Compute the balance of Investment in Gator Co. Stock on December 31, Year 1.$fill in the blank ead8c9031057025_1 c. How does valuing an investment under the equity method differ from valuing an investment at fair value? Under the method, the investor will record their proportionate share of the…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
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning