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 1 year 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:...
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:
Book value
Fair value
Cash
193,000
193,000
Inventory
40,000
39,400
Building
180,000
200,000
Total
413,000
432,400
Accounts Payable
3,000
3,000
Common Stock
200,000
Add. Paid-in Capital
110,000
Retained Earnings
100,000
Total
413,000
Pantop uses the complete equity method
to account for...
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:
Book value
Fair value
Cash
193,000
193,000
Inventory
40,000
39,400
Building
180,000
200,000
Total
413,000
432,400
Accounts Payable
3,000
3,000
Common Stock
200,000
Add. Paid-in Capital
110,000
Retained Earnings
100,000
Total
413,000
Pantop uses the complete equity method
to account for its investment in Sunny....
Concord Corporation had 129,600 shares of stock outstanding on January 1, 2020. On May 1, 2020,...
Concord Corporation had 129,600 shares of stock outstanding on
January 1, 2020. On May 1, 2020, Concord issued 64,800 shares. On
July 1, Concord purchased 10,560 treasury shares, which were
reissued on October 1. Compute Concord’s weighted-average number of
shares outstanding for 2020. Weighted-average number of shares
outstanding
Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1,...
Padre, Inc., buys 80 percent of the outstanding common stock of
Sierra Corporation on January 1, 2021, for $760,960 cash. At the
acquisition date, Sierra’s total fair value, including the
noncontrolling interest, was assessed at $951,200 although Sierra’s
book value was only $619,000. Also, several individual items on
Sierra’s financial records had fair values that differed from their
book values as follows:
Book Value
Fair Value
Land
$
67,400
$
290,400
Buildings and equipment (10-year remaining life)
335,000
299,000
Copyright...
Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1,...
Padre, Inc., buys 80 percent of the outstanding common stock of
Sierra Corporation on January 1, 2015, for $751,680 cash. At the
acquisition date, Sierra’s total fair value, including the
noncontrolling interest, was assessed at $939,600 although Sierra’s
book value was only $683,000. Also, several individual items on
Sierra’s financial records had fair values that differed from their
book values as follows:
Book Value
Fair Value
Land
$
68,200
$
268,200
Buildings and equipment
(10-year remaining life)
350,000
327,000
Copyright...
Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1,...
Padre, Inc., buys 80 percent of the outstanding common stock of
Sierra Corporation on January 1, 2021, for $680,000 cash. At the
acquisition date, Sierra’s total fair value, including the
noncontrolling interest, was assessed at $850,000 although Sierra’s
book value was only $600,000. Also, several individual items on
Sierra’s financial records had fair values that differed from their
book values as follows
Book Value
Fair Value
Land
$
60,000
$
225,000
Buildings and equipment (10-year remaining life)
275,000
250,000
Copyright...
Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1,...
Padre, Inc., buys 80 percent of the outstanding common stock of
Sierra Corporation on January 1, 2018, for $736,960 cash. At the
acquisition date, Sierra’s total fair value, including the
noncontrolling interest, was assessed at $921,200 although Sierra’s
book value was only $634,000. Also, several individual items on
Sierra’s financial records had fair values that differed from their
book values as follows:
Book Value
Fair Value
Land
$
60,800
$
237,800
Buildings and equipment (10-year remaining life)
301,000
268,000
Copyright...
Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1,...
Padre, Inc., buys 80 percent of the outstanding common stock of
Sierra Corporation on January 1, 2018, for $771,840 cash. At the
acquisition date, Sierra’s total fair value, including the
noncontrolling interest, was assessed at $964,800 although Sierra’s
book value was only $609,000. Also, several individual items on
Sierra’s financial records had fair values that differed from their
book values as follows:
Book Value
Fair Value
Land
$
68,400
$
300,400
Buildings and equipment (10-year
remaining life)
322,000
293,000
Copyright...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Can someone show me how to write a Haskell function using snd on a list of...
- Please do in java Program 3: Give a baby $5,000! Did you know that, over the...
- This is all one question, thank you so much in advance! You must evaluate the purchase...
- 10. Consider a market in which there is a monopoly manufacturer and a mo nopoly retailer....
- Write a function fun(x) that takes as input a positive number x and solves the following...
- Describe the principles and operations of movement sensors: Doppler-Effect Velocity sensor and Spring-Mass Accelerometor; State the...
- This is all one question, thank you so much in advance. The Bigbee Bottling Company is...
ADVERTISEMENT