Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter E, Problem E.41AP
(Learning Objectives 2, 3: Analyze and report equity and equity-method investments) The beginning
| Equity-method Investment in Jasmine Software..................................................... | $618,000 |
Homesby completed the following investment transactions during the year:
| Mar 16 | Purchased 2,700 shares Lowell, Inc. common stock (10% of Lowell’s stock) as a long-term equity investment, paying $12.50 per share. |
| May 21 | Received a cash dividend of $2.25 per share on the Lowell investment. |
| Aug 17 | Received a cash dividend of $83,000 from Jasmine Software. |
| Dec 31 | Received annual reports from Jasmine Software; net income for the year was $550,000. Of this amount, Homesby’s share was 27%. |
At year-end, the fair values of Homesby’s investments were as follows: Lowell, $39,000; Jasmine, $747,000.
Requirements
- 1. Record the transactions in the journal of Homesby.
- 2.
Post entries to the T-account for Equity-method Investment in Jasmine Software, and determine its balance at December 31. - 3. Show how to report the Investment in Equity Securities and the Equity-method Investment in Jasmine Software accounts on Homesby’s balance sheet at December 31.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Learning Objective 7: Calculate return on assets) In 2018, Ambrosia Corporation LO 7reported $100 million in sales, $18 million in net income, and average total assets of $200 million.What is Ambrosia’s return on assets in 2018?
(Learning Objectives 3, 4: Evaluate business operations; construct and analyze anincome statement, a statement of retained earnings, and a balance sheet) The assets andliabilities of Full Moon Products, Inc., as of December 31, 2018, and revenues and expenses forthe year ended on that date are as follows:Equipment........................... $ 115,000Interest expense................... 10,000Interest payable ................... 2,800Accounts payable ................ 25,000Salary expense..................... 108,900Building............................... 405,000Cash.................................... 46,000Common stock.................... 26,100Land................................... $ 29,000Note payable...................... 99,200Property tax expense .......... 7,300Rent expense ...................... 41,000Accounts receivable............ 85,000Service revenue................... 451,600Supplies.............................. 6,200Utilities expense ................. 8,100Beginning…
Use attachment to answer the following
Required:
a. Calculate return on common equity and disaggregate ROCE for Years 5 and 9 using end-of-year values for com- putations requiring an average (assume fixed assets and working capital are operating and a 50% tax rate).
b. Comment on Texas Telecom’s use of financial leverage.
Chapter E Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. E - Prob. 1QCCh. E - Rolling Hills Productions held investments in...Ch. E - Prob. 3QCCh. E - Crandall's investment is in less than 2% of...Ch. E - Dumois Corporation purchased 1,500 shares of...Ch. E - Prob. 6QCCh. E - Use the Dumois Corporation data in question 5....Ch. E - Prob. 8QCCh. E - Prob. 9QCCh. E - Prob. 10QC
Ch. E - Prob. E.1SCh. E - (Learning Objective 2: Account for investments in...Ch. E - Prob. E.3SCh. E - Prob. E.4SCh. E - Prob. E.5SCh. E - Prob. E.6SCh. E - Prob. E.7SCh. E - Prob. E.8SCh. E - Prob. E.9SCh. E - Prob. E.10SCh. E - (Learning Objective 5: Record a held-to-maturity...Ch. E - Prob. E.12SCh. E - (Learning Objective 5: Calculate and record...Ch. E - Prob. E.14SCh. E - Prob. E.15SCh. E - Prob. E.16SCh. E - Prob. E.17AECh. E - (Learning Objective 2: Record transactions for...Ch. E - (Learning Objective 2: Analyze and report...Ch. E - Prob. E.20AECh. E - Prob. E.21AECh. E - Prob. E.22AECh. E - Prob. E.23AECh. E - Prob. E.24BECh. E - Prob. E.25BECh. E - (Learning Objective 2: Analyze and report...Ch. E - (Learning Objective 3: Account for transactions...Ch. E - Prob. E.28BECh. E - Prob. E.29BECh. E - Prob. E.30BECh. E - Prob. E.31QCh. E - Prob. E.32QCh. E - Prob. E.33QCh. E - Prob. E.34QCh. E - Prob. E.35QCh. E - Dividends received on an equity-method investment...Ch. E - Prob. E.37QCh. E - Prob. E.38QCh. E - Prob. E.39APCh. E - (Learning Objectives 2, 3: Analyze and report...Ch. E - (Learning Objectives 2, 3: Analyze and report...Ch. E - Prob. E.42APCh. E - Prob. E.43BPCh. E - LO 2, 3 (Learning Objectives 2, 3: Analyze and...Ch. E - Prob. E.45BPCh. E - Prob. E.46BPCh. E - Prob. E.47DC
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
- Question Robinson plc have decided that in order to make better investment appraisal decisions they need to re-calculate the company's cost of capital. The following information is extracted from the company's statement of financial position (balance sheet): £ (millions) Fixed assets: 890 Current assets: 370 Current liabilities: (220) Non-current liabilities: 5% Bonds (£100 par) redeemable in 7 years (160) 4% Irredeemable Bonds (£100 par) (190) Bank Loan (120) Share capital and reserves Ordinary Shares (nominal value 50p)___ 180 7% Preference shares (£1 nominal value) 100 Reserves 290 Additional information: The risk-free rate of return on short-dated government bonds is currently 3%. The market risk premium has been estimated at 7% and the company's beta is 1.5. The company's ordinary share price is £3 and the preference share price is £0.8. The irredeemable bonds are currently trading at a 5% discount to par value and the redeemable bonds are currently trading at £105. The rate of…arrow_forwardPls do fast..i will rate instantly for sure Try to give solution in typed form!!arrow_forwardUE- GRADE 12. Show the solutions. Find the value. Owner's Equity Changes in year: Additional investment Drawings Total Revenues Total Expense 18,000 820,000 790,000arrow_forward
- Please Answer My Questions Financial Management... My question number 1... Please Answer 3 Subparts.... Because I know the tutor can max Answer 3 sub parts.... And explaining soal in the first page and the next page in image is A question sub parts.. ~ Thank uarrow_forwardPlease help me to analyze this Financialsarrow_forwardAnswer the question in the picture.arrow_forward
- i need the answer quicklyarrow_forwardAV Cements Ltd. is financed with 40 percent debt and 60 percent equity. This mixture of debt and equity is referred to as the firm's?Question 14 Answera.Asset allocationb.Capital budgetc.Working capitald.Capital structurearrow_forwardClick to watch the Tell Me More Learning Objective 5 video and then answer the questions below. 1. Starlight Company had the following data taken from its most recent financial statements: Sales Interest expense 56,000 500,000 Total average assets 2,000,000 Total average liabilities 1,200,000 Total average stockholders' equity 800,000 Based on these data, calculate Starlight Company's return on total assets. Net income $3,200,000 a. 8% b. 12.5% c. 27.8% d. 20.5arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning
Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License