Question
In: Accounting
As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 400,000 shares for...
As a long-term investment, Painters' Equipment Company purchased
20% of AMC Supplies Inc.'s 400,000 shares for $480,000 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 $250,000 and distributed
cash dividends of 25 cents per share. At year-end, the fair value
of the shares is $505,000.
Required:
1. Assume no significant influence was acquired.
Prepare the appropriate journal entries from the purchase through
the end of the year.
2. Assume significant influence was acquired.
Prepare the appropriate journal entries from the purchase through
the end of the year.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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...
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
20% of AMC Supplies Inc.'s 420,000 shares for $500,000 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 $270,000 and distributed
cash dividends of 25 cents per share. At year-end, the fair value
of the shares is $527,000.
Required:
1. Assume no significant influence was acquired.
Prepare...
As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 480,000 shares for...
As a long-term investment, Painters' Equipment Company purchased
20% of AMC Supplies Inc.'s 480,000 shares for $560,000 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 $330,000 and distributed
cash dividends of 25 cents per share. At year-end, the fair value
of the shares is $593,000.
2. Assume significant influence was acquired.
Prepare the appropriate...
As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 590,000 shares for...
As a long-term investment, Painters' Equipment Company purchased
20% of AMC Supplies Inc.'s 590,000 shares for $670,000 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 $350,000 and distributed
cash dividends of 20 cents per share. At year-end, the fair value
of the shares is $714,000.
1. Assume no significant influence was
acquired. Prepare the...
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
25% of AMC Supplies Inc.'s 520,000 shares for $600,000 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 $370,000 and distributed
cash dividends of 25 cents per share. At year-end, the fair value
of the shares is $637,000.
Required:
1. Assume no significant influence was acquired.
Prepare...
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, Fair Company purchased 20% of Midlin Company’s 300,000 shares for $360,000 at...
As a long-term investment, Fair Company purchased 20% of Midlin
Company’s 300,000 shares for $360,000 at the beginning of the
reporting year of both companies. During the year, Midlin earned
net income of $135,000 and distributed cash dividends of $0.25 per
share. At year-end, the fair value of the shares is $375,000.
1. Assume no significant influence was acquired. Record the
transactions from the purchase through the end of the year,
including any adjustment for the investment’s fair value, if...
As a long-term investment, Fair Company purchased 20% of Midlin Company’s 300,000 shares for $360,000 at...
As a long-term investment, Fair Company purchased 20% of Midlin
Company’s 300,000 shares for $360,000 at the beginning of the
reporting year of both companies. During the year, Midlin earned
net income of $135,000 and distributed cash dividends of $0.25 per
share. At year-end, the fair value of the shares is $375,000. 1.
Assume no significant influence was acquired. Record the
transactions from the purchase through the end of the year,
including any adjustment for the investment’s fair value, if...
A Boca Raton Company, Purchased $35,000 shares of common stock of Polo for (Long-Term) Investment $...
A Boca Raton Company, Purchased $35,000 shares of common stock
of Polo for (Long-Term) Investment $ 700,000 during the year for
Polo Corp. Corp reported net income of $300,000 and paid $100,000
of dividends.
a.) assuming that $ 35,000 shares represent a 10% interest in
the Polo Corp.
b.) Prepare what entries in Acct. that Boca Raton Company should
make for it's in Investment Polo Stock that Year.
C.) What is the balance of stock accounts for Polo Investment on...
Sprockets, Inc. made an investment into three different long term assets. The first was purchased for...
Sprockets, Inc. made an investment into three different long
term assets. The first was purchased for 750,000 and will be
depreciated at a straight line for five years. The second was an
investment of $1,000,000 and will be depreciated using the 5-year
MACRS method. The third cost $1,500,000 and will be depreciated
utilizing 7-years MACRS. The company’s required rate of return is
10% and the tax rate is 21%.
What is the depreciation schedule for the first asset?
What is...
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