Question
In: Accounting
Sofie Company buys stock in Nut Corporation in cash on January 1, 2020, and reports the...
| Sofie Company buys stock in Nut Corporation in cash on January 1, 2020, and reports the investment as having no significant influence. | |||||||||
| The percentage of investment | 15% | Amount paid | $6,000,000 | ||||||
| On January 1, 2022 Sofie Company makes the following additional investment in Nut Corporation and changes to the equity method of reporting for this investment: | |||||||||
| The additional percentage of investment | 25% | Additional amount paid | $15,000,000 | ||||||
| December 31, 2020 | December 31, 2021 | ||||||||
| Fair value of the 15% investment is as follows: | $6,200,000 | $6,450,000 | |||||||
| Nut Corporation reported the following amounts for the years: | |||||||||
| 2020 | 2021 | 2022 | |||||||
| Net Income | $150,000 | $200,000 | $250,000 | ||||||
| Cash dividends (Paid at year-end) | $50,000 | $80,000 | $100,000 | ||||||
|
Additional information: Nut Corporation reported no comprehensive income and any basis difference is attributed to goodwill. Required: Develop a table showing the calculation of what the amount Sofie Corporation will report on the balance sheet for the investment in Nut Corporation on December 31, 2022. |
|||||||||
Solutions
Expert Solution
| Investment Value Recorded in Sofei Corporation | |||
| Amount in $ | |||
| Particulars | As on 31st December 2020 | As on 31st December 2021 | As on 31st December 2022 |
| Investment in Nut Corporation | 60,00,000 | 64,50,000 | 214,50,000 |
| Notes :- | |||
| 1. As on 31st December 2020 & 31st December 2021 the investment value of Sofei Corporation in Nut Corporationis below 20% then the Investment show at Fair value in Sofei Corporation Balance Sheet. | |||
| 2. The Investment value in year 2022 the investment share is increas 15% to 40% then the investment reported in Balance Sheet as per Investment Equity mothed .The Investment value as below. | |||
| Investment Balance as on 31st December 2021 | 64,50,000 | ||
| 25% Additional Value on 1st Jan.2022 | 150,00,000 | ||
| Total Investment Value as on 31st December 2022 | 214,50,000 | ||
ekkarill92 answered 2 years agoRelated Solutions
Sofie Company buys stock in Nut Corporation in cash on January 1, 2020, and reports the...
Sofie Company buys stock in Nut Corporation in cash on January
1, 2020, and reports the investment as having no significant
influence.
The percentage of investment 15% Amount paid $6,000,000
On January 1, 2022, Sofie Company makes the following additional
investment in Nut Corporation and changes to the equity method of
reporting for this investment.
The additional percentage of investment 25% Additional amount
paid $15,000,000
Fair value of the 15% investment is as follows: 12/31/2020
$6,200,000 12/31/2021 $6,450.000
Nut Corporation...
Sofie Company buys stock in Nut Corporation in cash on January 1, 2020, and reports the...
Sofie Company buys stock in Nut Corporation in cash on January 1,
2020, and reports the investment as having no significant
influence.
The percentage of investment
15%
Amount paid
$6,000,000
On January
1, 2022 Sofie Company makes the following additional investment in
Nut Corporation and changes to the equity method of reporting for
this investment:
The
additional percentage of investment
25%
Additional amount paid
$15,000,000
December 31, 2020
December 31, 2021
Fair
value of the 15% investment is as follows:...
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The following information about Sunny
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Cash
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Building
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413,000
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3,000
3,000
Common Stock
200,000
Add. Paid-in Capital
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Retained Earnings
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On January 1, 2020, Pantop Corporation acquired 85% of the outstanding common stock of Sunny Company...
On January 1, 2020, Pantop Corporation acquired 85% of the
outstanding common stock of Sunny Company for $527,000. There was
no control premium.
The following information about Sunny
Company on January 1, 2020 was available:
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Cash
193,000
193,000
Inventory
40,000
39,400
Building
180,000
200,000
Total
413,000
432,400
Accounts Payable
3,000
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Common Stock
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Retained Earnings
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413,000
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