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
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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
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As a long-term investment, Painters' Equipment Company purchased
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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
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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
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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...
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