Question
In: Accounting
The Coca-Cola Company owns 40 percent of the voting stock of Coca-Cola FEMSA, acquired at book...
The Coca-Cola Company owns 40 percent of the voting stock of Coca-Cola FEMSA, acquired at book value. Assume that Coca-Cola FEMSA reports income of $6 million for 2013. Coca-Cola FEMSA regularly sells canned beverages to Coca-Cola at a markup of 42 percent on cost. During 2013 Coca-Cola FEMSA's sales to Coca-Cola totaled $30 million. Coca-Cola's January 1, 2013, inventories include $1,620,000 purchased from Coca-Cola FEMSA. Coca-Cola's December 31, 2013, inventories include $1,458,000 purchased from Coca-Cola FEMSA. Prepare the 2013 journal entry on Coca-Cola's books to recognize its income from Coca-Cola FEMSA under the equity method.
Solutions
Expert Solution
As Coca-Cola company owns 40% of the voting stock in Coca-Cola FEMSA therefore Coca Cola FEMSA will be treated as it's associate.
Under the Equity method for consolidating the results of Investee Company or Associate Investment is initiallyrecorded at cost. Subsequently carruying amount is increased on the basis of sshare of profits or decreased on the basis of share of loss in associate.
ekkarill92 answered 2 years agoRelated Solutions
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the public at 105. The bonds had a cash interest rate of 10...
Cairns owns 80 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...
Cairns owns 80 percent of the voting stock of Hamilton, Inc. The
parent’s interest was acquired several years ago on the date that
the subsidiary was formed. Consequently, no goodwill or other
allocation was recorded in connection with the acquisition. Cairns
uses the equity method in its internal records to account for its
investment in Hamilton.
On January 1, 2011, Hamilton sold
$1,500,000 in 10-year bonds to the public at 105. The bonds had a
cash interest rate of 8...
Cairns owns 80 percent of the voting stock of Hamilton, Inc. The parent's interest was acquired...
Cairns owns 80 percent of the voting stock of Hamilton, Inc.
The parent's interest was acquired several years ago on the date
that the subsidiary was formed.
Consequently, no goodwill or other allocation was recorded in
connection with the acquisition.
Cairns uses the equity method in its internal records to account
for its investment in Hamilton.
On January 1, 2011, Hamilton sold $1,300,000 in 10-year bonds to
the public at 105.
The bonds had a cash interest rate of 8...
Cairns owns 70 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...
Cairns owns 70 percent of the voting stock of Hamilton, Inc. The
parent’s interest was acquired several years ago on the date that
the subsidiary was formed. Consequently, no goodwill or other
allocation was recorded in connection with the acquisition. Cairns
uses the equity method in its internal records to account for its
investment in Hamilton. On January 1, 2014, Hamilton sold
$1,900,000 in 10-year bonds to the public at 110. The bonds had a
cash interest rate of 8...
Cairns owns 75 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...
Cairns owns 75 percent of the voting stock of Hamilton, Inc. The
parent’s interest was acquired several years ago on the date that
the subsidiary was formed. Consequently, no goodwill or other
allocation was recorded in connection with the acquisition. Cairns
uses the equity method in its internal records to account for its
investment in Hamilton.
On January 1, 2014, Hamilton sold $2,600,000 in 10-year bonds to
the public at 105. The bonds had a cash interest rate of 9...
Cairns owns 75 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...
Cairns owns 75 percent of the voting stock of Hamilton, Inc. The
parent’s interest was acquired several years ago on the date that
the subsidiary was formed. Consequently, no goodwill or other
allocation was recorded in connection with the acquisition. Cairns
uses the equity method in its internal records to account for its
investment in Hamilton. On January 1, 2014, Hamilton sold
$2,200,000 in 10-year bonds to the public at 105. The bonds had a
cash interest rate of 8...
Cairns owns 70 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...
Cairns owns 70 percent of the voting stock of Hamilton, Inc. The
parent’s interest was acquired several years ago on the date that
the subsidiary was formed. Consequently, no goodwill or other
allocation was recorded in connection with the acquisition. Cairns
uses the equity method in its internal records to account for its
investment in Hamilton.
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Cairns owns 70 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...
Cairns owns 70 percent
of the voting stock of Hamilton, Inc. The parent’s interest was
acquired several years ago on the date that the subsidiary was
formed. Consequently, no goodwill or other allocation was recorded
in connection with the acquisition. Cairns uses the equity method
in its internal records to account for its investment in
Hamilton.
On January 1, 2014,
Hamilton sold $2,300,000 in 10-year bonds to the public at 110. The
bonds had a cash interest rate of 9...
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