On January 1 Criquet Co. acquired an interest in the Tamlee Co. for $500,000. At December...

On January 1 Criquet Co. acquired an interest in the Tamlee Co. for $500,000. At December 31, Tamlee Co. declared and paid a cash dividend of $50,000 and reported a net income of $160,000.

REQUIRED:

Prepare the journal entries for the Criquet Co. under each of the independent circumstances:

a. Criquet Co. acquires a 10% interest in the Tamlee Co.

b. Criquet Co. acquires a 25% interest in the Tamlee Co.

Solutions

Expert Solution

a)	Jan 1 - Purchase	Investment in Tamlee Co. Stock	500000
		Cash		500000
		(To record the 10% share of stock in Tamlee Co.)

	Dec 31 - Income	Investment in Tamlee Co. Stock	16000
		Income of Tamlee Co. ( 160000 x 10%)		16000
		(To record the share in income on Tamlee Co.)

	Dec 31- Dividends	Cash ( 50000 x 10% )	5000
		Investment in Tamlee Co. Stock		5000
		(To record the dividend received from Tamlee Co.)


b)	Jan 1 - Purchase	Investment in Tamlee Co. Stock	500000
		Cash		500000
		(To record the 25% share of stock in Tamlee Co.)

	Dec 31 - Income	Investment in Tamlee Co. Stock	40000
		Income of Tamlee Co. ( 160000 x 25%)		40000
		(To record the share in income on Tamlee Co.)

	Dec 31- Dividends	Cash ( 50000 x 25% )	12500
		Investment in Tamlee Co. Stock		12500
		(To record the dividend received from Tamlee Co.)

ekkarill92 answered 2 hours ago

Next > < Previous

Related Solutions

2. On January 1 Criquet Co. acquired an interest in the Tamlee Co. for $500,000. At...

2. On January 1 Criquet Co. acquired an interest in the Tamlee Co. for $500,000. At December 31, Tamlee Co. declared and paid a cash dividend of $50,000 and reported a net income of $160,000. REQUIRED: Prepare the journal entries for the Criquet Co. under each of the independent circumstances: a. Criquet Co. acquires a 10% interest in the Tamlee Co. b. Criquet Co. acquires a 25% interest in the Tamlee Co.

Agee Corporation acquired a 35% interest in Trent Company on January 1, 2018, for $500,000. At...

Agee Corporation acquired a 35% interest in Trent Company on January 1, 2018, for $500,000. At that time, Trent had 1,000,000 shares of its $1 par common stock issued and outstanding. During 2018, Trent paid cash dividends of $168,000 and thereafter declared and issued a 5% common stock dividend when the fair value was $2 per share. Trent's net income for 2018 was $360,000. What is the balance in Agee's equity investment account at the end of 2018? Balance in...

On January 1, 2018, Kelly Corporation acquired bonds with a face value of $500,000 for $483,841.79,...

On January 1, 2018, Kelly Corporation acquired bonds with a face value of $500,000 for $483,841.79, a price that yields a 10% effective annual interest rate, pay interest on June 30 and December 31, and are due December 31, 2021, and are being held to maturity. Required: Prepare journal entries to record the purchase of the bonds and the first two interest receipts using the: 1.) straight line method of amortization 2.) effective interest method of amortization

Matthews Co. acquired all of the common stock of Jackson Co. on January 1, 2020. As...

Matthews Co. acquired all of the common stock of Jackson Co. on January 1, 2020. As of that date, Jackson had the following trial balance: Debit Credit Accounts payable $ 60,000 Accounts receivable $ 50,000 Additional paid-in capital 60,000 Buildings (net) (20-year life) 140,000 Cash and short-term investments 70,000 Common stock 300,000 Equipment (net) (8-year life) 240,000 Intangible assets (indefinite life) 110,000 Land 90,000 Long-term liabilities (mature 12/31/22) 180,000 Retained earnings, 1/1/20 120,000 Supplies 20,000 Totals $ 720,000 $ 720,000...

On January 1, 2015, Pack Co. acquired 80% of the common stock of Sack Co. by...

On January 1, 2015, Pack Co. acquired 80% of the common stock of Sack Co. by paying $80,000. On that date Sack' land was undervalued $3,800 and its Buildings (7 yr life) were undervalued $4,200 and its equipment (5 Yr life) were undervalued $2,000. A. Show the elements making of the cost of the investment. (Hint: Set up a schedule showing the controlling and non-controlling interest in the individual elements) B. Prepare consolidation entry S to eliminate the sub’s equity...

) Matthews Co. acquired all of the common stock of Jackson Co. on January 1, 2017....

) Matthews Co. acquired all of the common stock of Jackson Co. on January 1, 2017. As of that date, Jackson had the following trial balance: Debit Credit Accounts payable $ 60,000 Accounts receivable $ 50,000 Additional paid-in capital 60,000 Buildings (net) (20-year life) 140,000 Cash and short-term investments 70,000 Common stock 300,000 Equipment (net) (8-year life) 240,000 Intangible assets (indefinite life) 110,000 Land 90,000 Long-term liabilities (mature 12/31/19) 180,000 Retained earnings, 1/1/17 120,000 Supplies 20,000 Totals $ 720,000 $...

Tudor Company acquired $500,000 of Carr Corporation bonds for $487,706.69 on January 1, 2019. The bonds...

Tudor Company acquired $500,000 of Carr Corporation bonds for $487,706.69 on January 1, 2019. The bonds carry an 11% stated interest rate, pay interest semiannually on January 1 and July 1, were issued to yield 12%, and are due January 1, 2022. Required: 1. Prepare an investment interest income and discount amortization schedule using the: a. straight-line method b. effective interest method 2. Prepare the July 1, 2021, journal entries to record the interest income under both methods. 1a. Prepare...

Tudor Company acquired $500,000 of Carr Corporation bonds for $487,706.69 on January 1, 2018. The bonds...

Tudor Company acquired $500,000 of Carr Corporation bonds for $487,706.69 on January 1, 2018. The bonds carry an 11% stated interest rate, pay interest semiannually on January 1 and July 1, were issued to yield 12%, and are due January 1, 2021. Required: 1. Prepare an investment interest income and discount amortization schedule using the: a. straight-line method b. effective interest method 2. Prepare the July 1, 2020, journal entries to record the interest income under both methods. Prepare an...

On January 1, 2018, Co. P acquired 90% of Co. S for $550,000, plus $15,000 in...

On January 1, 2018, Co. P acquired 90% of Co. S for $550,000, plus $15,000 in acquisition costs. On the date of acquisition, Co. S had the following balance sheet: Assets Liabilities & Equity Accounts Receivable 150,000 Current Liabilities 260,000 Inventory 180,000 Bonds Payable 250,000 Land 200,000 Common Stock, $1 Par 400,000 Buildings 550,000 PIC In Excess of Par 70,000 Acc. Deprecition (Bldg) (100,000) Retained Earnings 300,000 Equipment 400,000 Acc. Depreciation (Equip) (120,000) Goodwill 20,000 Total Assets 1,280,000 Total Liab....

$500,000 of bonds of Tom Turkey Co. were sold on December 1, 20A at $518,375 plus...

$500,000 of bonds of Tom Turkey Co. were sold on December 1, 20A at $518,375 plus accrued interest. The bonds pay 6% interest annually. Interest payments are made on February 28 and August 31. The bonds were dated September 1, 20A and have a 9 year life. Tom Turkey has a fiscal year end of August 31. *Looking for andswers to questions 6-9 Required: 1.What is the amount of interest that will be paid to the bondholders on a monthly...

Subjects