Question
In: Accounting
As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 470,000 shares for...
As a long-term investment, Painters' Equipment Company purchased
20% of AMC Supplies Inc.'s 470,000 shares for $550,000 at the
beginning of the fiscal year of both companies. On the purchase
date, the fair value and book value of AMC’s net assets were equal.
During the year, AMC earned net income of $320,000 and distributed
cash dividends of 20 cents per share. At year-end, the fair value
of the shares is $582,000.
1. Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.
Record any necessary year-end adjusting journal entry when the fair value of the shares held are $582,000 at year-end.
Help me with the name for the credit part. The correct answer is
Dr. Fair value adjustment 320,000
Cr, ? ( unrealized holding gain or loss - OCI is incorrect) 320,000
2. Assume significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.
- Record the cash dividend of 20 cents per share.
Help me with the name for the credit part. The correct answer is
Dr. Cash 18,800
Cr, ? ( Dividend revenue and interest revenue is incorrect) 18,800
Solutions
ekkarill92 answered 2 years agoRelated Solutions
As a long-term investment, Painters' Equipment Company purchased20% of AMC Supplies Inc.'s 470,000 shares for...
As a long-term investment, Painters' Equipment Company purchased
20% of AMC Supplies Inc.'s 470,000 shares for $550,000 at the
beginning of the fiscal year of both companies. On the purchase
date, the fair value and book value of AMC’s net assets were equal.
During the year, AMC earned net income of $320,000 and distributed
cash dividends of 20 cents per share. At year-end, the fair value
of the shares is $582,000.Required:1. Assume no significant influence was acquired.
Prepare the appropriate...
As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 420,000 shares for...
As a long-term investment, Painters' Equipment Company purchased
20% of AMC Supplies Inc.'s 420,000 shares for $500,000 at the
beginning of the fiscal year of both companies. On the purchase
date, the fair value and book value of AMC’s net assets were equal.
During the year, AMC earned net income of $270,000 and distributed
cash dividends of 25 cents per share. At year-end, the fair value
of the shares is $527,000.
Required:
1. Assume no significant influence was acquired.
Prepare...
As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 480,000 shares for...
As a long-term investment, Painters' Equipment Company purchased
20% of AMC Supplies Inc.'s 480,000 shares for $560,000 at the
beginning of the fiscal year of both companies. On the purchase
date, the fair value and book value of AMC’s net assets were equal.
During the year, AMC earned net income of $330,000 and distributed
cash dividends of 25 cents per share. At year-end, the fair value
of the shares is $593,000.
2. Assume significant influence was acquired.
Prepare the appropriate...
As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 400,000 shares for...
As a long-term investment, Painters' Equipment Company purchased
20% of AMC Supplies Inc.'s 400,000 shares for $480,000 at the
beginning of the fiscal year of both companies. On the purchase
date, the fair value and book value of AMC’s net assets were equal.
During the year, AMC earned net income of $250,000 and distributed
cash dividends of 25 cents per share. At year-end, the fair value
of the shares is $505,000.
Required:
1. Assume no significant influence was acquired.
Prepare...
As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 590,000 shares for...
As a long-term investment, Painters' Equipment Company purchased
20% of AMC Supplies Inc.'s 590,000 shares for $670,000 at the
beginning of the fiscal year of both companies. On the purchase
date, the fair value and book value of AMC’s net assets were equal.
During the year, AMC earned net income of $350,000 and distributed
cash dividends of 20 cents per share. At year-end, the fair value
of the shares is $714,000.
1. Assume no significant influence was
acquired. Prepare the...
As a long-term investment, Painters' Equipment Company purchased 25% of AMC Supplies Inc.'s 520,000 shares for...
As a long-term investment, Painters' Equipment Company purchased
25% of AMC Supplies Inc.'s 520,000 shares for $600,000 at the
beginning of the fiscal year of both companies. On the purchase
date, the fair value and book value of AMC’s net assets were equal.
During the year, AMC earned net income of $370,000 and distributed
cash dividends of 25 cents per share. At year-end, the fair value
of the shares is $637,000.
Required:
1. Assume no significant influence was acquired.
Prepare...
As a long-term investment, Fair Company purchased 20% of Midlin Company’s 300,000 shares for $360,000 at...
As a long-term investment, Fair Company purchased 20% of Midlin
Company’s 300,000 shares for $360,000 at the beginning of the
reporting year of both companies. During the year, Midlin earned
net income of $135,000 and distributed cash dividends of $0.25 per
share. At year-end, the fair value of the shares is $375,000.
1. Assume no significant influence was acquired. Record the
transactions from the purchase through the end of the year,
including any adjustment for the investment’s fair value, if...
As a long-term investment, Fair Company purchased 20% of Midlin Company’s 300,000 shares for $360,000 at...
As a long-term investment, Fair Company purchased 20% of Midlin
Company’s 300,000 shares for $360,000 at the beginning of the
reporting year of both companies. During the year, Midlin earned
net income of $135,000 and distributed cash dividends of $0.25 per
share. At year-end, the fair value of the shares is $375,000. 1.
Assume no significant influence was acquired. Record the
transactions from the purchase through the end of the year,
including any adjustment for the investment’s fair value, if...
A Boca Raton Company, Purchased $35,000 shares of common stock of Polo for (Long-Term) Investment $...
A Boca Raton Company, Purchased $35,000 shares of common stock
of Polo for (Long-Term) Investment $ 700,000 during the year for
Polo Corp. Corp reported net income of $300,000 and paid $100,000
of dividends.
a.) assuming that $ 35,000 shares represent a 10% interest in
the Polo Corp.
b.) Prepare what entries in Acct. that Boca Raton Company should
make for it's in Investment Polo Stock that Year.
C.) What is the balance of stock accounts for Polo Investment on...
Sprockets, Inc. made an investment into three different long term assets. The first was purchased for...
Sprockets, Inc. made an investment into three different long
term assets. The first was purchased for 750,000 and will be
depreciated at a straight line for five years. The second was an
investment of $1,000,000 and will be depreciated using the 5-year
MACRS method. The third cost $1,500,000 and will be depreciated
utilizing 7-years MACRS. The company’s required rate of return is
10% and the tax rate is 21%.
What is the depreciation schedule for the first asset?
What is...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Sales 3 million dollars per year Cost of goods 1.7 million dollars per year Cash Expenses...
- Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility...
- Society: How do members within the groups behave? How do they interact with each other? How...
- Discuss similarities and differences between C3, C4, and CAM plants using examples of each. How does...
- Domino Co. has the following data related to an item of inventory: Beginning Inventory, March 1...
- When establishing goals and objectives, how would you describe the relationship between the goals and objectives...
- In your own words, describe how you differentiate between goals and objectives?.
ADVERTISEMENT