Question

In: Accounting

On January 1, 2015, Aly Inc., paid $83,800 for a 40 percent interest in Holy Corporation’s...

On January 1, 2015, Aly Inc., paid $83,800 for a 40 percent interest in Holy Corporation’s common stock. This investee had assets with a book value of $290,500 and liabilities of $117,000.

A patent held by Holy having a $13,600 book value was actually worth $31,600. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill.

During 2015, Holy earned income of $40,700 and dividends of $14,000 and the fair value of Aly investment in Holy on December 31, 2015 was $95,380.

During 2016, Holy had income of $70,000 and dividends of $19,000 and the fair value of Aly investment in Holy on December 31, 2016 was $106,180.

a.Prepare all of the journal entries for Aly, Inc. regarding their investment in Holy Corporation stock for 2015.

b. What balance should appear in the Investment in Holy account as of December 31, 2015?

c. Prepare all of the journal entries for Aly, Inc. regarding their investment in Holy Corporation stock for 2016.

d. What balance should appear in the Investment in Holy account as of December 31, 2016

Requiement 2: Assuming Aly uses the fair-value method, do the following:

a.

Prepare all of the journal entries for Aly regarding their investment in Holy Corporation stock for 2015

b. What balance should appear in the Investment in Holy account as of December 31, 2015

c. Prepare all of the journal entries for Aly regarding their investment in Holister Corporation stock for 2016.

d. What balance should appear in the Investment in Holy account as of December 31, 2016?

Solutions

Expert Solution

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

On January 1, 2017, Alison, Inc., paid $85,700 for a 40 percent interest in Holister Corporation’s...
On January 1, 2017, Alison, Inc., paid $85,700 for a 40 percent interest in Holister Corporation’s common stock. This investee had assets with a book value of $256,000 and liabilities of $83,500. A patent held by Holister having a $9,800 book value was actually worth $20,300. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2017, Holister earned income of $48,000 and declared and paid dividends of $16,000. In...
On January 1, 2020, Alison, Inc., paid $91,200 for a 40 percent interest in Holister Corporation’s...
On January 1, 2020, Alison, Inc., paid $91,200 for a 40 percent interest in Holister Corporation’s common stock. This investee had assets with a book value of $268,500 and liabilities of $98,500. A patent held by Holister having a $9,500 book value was actually worth $36,500. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2020, Holister earned income of $42,200 and declared and paid dividends of $14,000. In...
On January 1, 2017, Alison, Inc., paid $90,400 for a 40 percent interest in Holister Corporation’s...
On January 1, 2017, Alison, Inc., paid $90,400 for a 40 percent interest in Holister Corporation’s common stock. This investee had assets with a book value of $248,500 and liabilities of $93,500. A patent held by Holister having a $12,300 book value was actually worth $55,800. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2017, Holister earned income of $52,500 and declared and paid dividends of $18,000. In...
On January 1, 2017, Alison, Inc., paid $60,000 for a 40 percent interest in Holister Corporation’s...
On January 1, 2017, Alison, Inc., paid $60,000 for a 40 percent interest in Holister Corporation’s common stock. This investee had assets with a book value of $200,000 and liabilities of $75,000. A patent held by Holister having a $5,000 book value was actually worth $20,000. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2017, Holister earned income of $30,000 and declared and paid dividends of $10,000. In...
On January 1, 2014, Alison, Inc., paid $91,200 for a 40 percent interest in Holister Corporation’s...
On January 1, 2014, Alison, Inc., paid $91,200 for a 40 percent interest in Holister Corporation’s common stock. This investee had assets with a book value of $268,500 and liabilities of $98,500. A patent held by Holister having a $9,500 book value was actually worth $36,500. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2014, Holister earned income of $42,200 and declared and paid dividends of $14,000. In...
On January 1, 2017, Alison, Inc., paid $70,800 for a 40 percent interest in Holister Corporation’s...
On January 1, 2017, Alison, Inc., paid $70,800 for a 40 percent interest in Holister Corporation’s common stock. This investee had assets with a book value of $235,000 and liabilities of $95,000. A patent held by Holister having a $8,900 book value was actually worth $25,400. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2017, Holister earned income of $45,700 and declared and paid dividends of $15,000. In...
On January 1, 2017, Alison, Inc., paid $83,600 for a 40 percent interest in Holister Corporation’s...
On January 1, 2017, Alison, Inc., paid $83,600 for a 40 percent interest in Holister Corporation’s common stock. This investee had assets with a book value of $279,500 and liabilities of $118,500. A patent held by Holister having a $6,800 book value was actually worth $42,800. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2017, Holister earned income of $33,500 and declared and paid dividends of $11,000. In...
On January 1, 2017, Alison, Inc., paid $91,300 for a 40 percent interest in Holister Corporation’s...
On January 1, 2017, Alison, Inc., paid $91,300 for a 40 percent interest in Holister Corporation’s common stock. This investee had assets with a book value of $243,500 and liabilities of $87,500. A patent held by Holister having a $6,000 book value was actually worth $60,000. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2017, Holister earned income of $35,200 and declared and paid dividends of $12,000. In...
On January 1, 2017, Alison, Inc., paid $83,600 for a 40 percent interest in Holister Corporation’s...
On January 1, 2017, Alison, Inc., paid $83,600 for a 40 percent interest in Holister Corporation’s common stock. This investee had assets with a book value of $279,500 and liabilities of $118,500. A patent held by Holister having a $6,800 book value was actually worth $42,800. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2017, Holister earned income of $33,500 and declared and paid dividends of $11,000. In...
On January 1, 2017, Alison, Inc., paid $70,500 for a 40 percent interest in Holister Corporation’s...
On January 1, 2017, Alison, Inc., paid $70,500 for a 40 percent interest in Holister Corporation’s common stock. This investee had assets with a book value of $224,500 and liabilities of $96,500. A patent held by Holister having a $13,300 book value was actually worth $41,800. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2017, Holister earned income of $51,500 and declared and paid dividends of $17,000. In...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT