PLEASE SHOW HOW YOU GOT THE NUMBERS Ceres Corporation is considering making a significant long-term investment...

PLEASE SHOW HOW YOU GOT THE NUMBERS

Ceres Corporation is considering making a significant long-term investment in Pisces Ltd., a young and very promising company. Ceres decides to make a smaller investment first, and if Pisces turns out to be successful, Ceres intends to make an additional investment to reach significant influence. Pisces has 200,000 shares authorized, 110,000 shares issued and 90,000 shares outstanding.

On January 1, 2016, Pisces issues Ceres 10,000 shares for $400,000 in cash (so now there are 120,000 shares issued, and 100,000 shares outstanding).

Additional information:

1. On November 1, 2016, Pisces declares a total cash dividend of $180,000.

2. Pisces reports $225,000 net income for 2014. Its stock price on December 31, 2016 is $38.

3. On November 1, 2017, Pisces announces a total dividend of $270,000 to be paid on January 2, 2018.

4. Pisces reports $360,000 net income for 2017. Its stock price on December 31, 2017 is $44.

5. On March 15, 2018, Ceres is approached by an investment fund which offers to buy all their Pisces shares for $55 per share, a 25% premium over the current stock price of $44. Ceres accepts the offer and sells the shares on that day.

Instructions

Assuming Ceres uses the fair value through net income model (FV–NI) to account for this investment:

a) Prepare the journal entries in Ceres’s books for the 2016 calendar year.

b) Prepare the journal entries in Ceres’s books for the 2017 calendar year.

c) Prepare the journal entries in Ceres’s books for the 2018 calendar yea

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

I GIVE THUMBS UPS Ceres Corporation is considering making a significant long-term investment in Pisces Ltd.,...

I GIVE THUMBS UPS Ceres Corporation is considering making a significant long-term investment in Pisces Ltd., a young and very promising company. Ceres decides to make a smaller investment first, and if Pisces turns out to be successful, Ceres intends to make an additional investment to reach significant influence. Pisces has 200,000 shares authorized, 110,000 shares issued and 90,000 shares outstanding. On January 1, 2016, Pisces issues Ceres 10,000 shares for $400,000 in cash (so now there are 120,000 shares...

Please show how work on how you got this answer. Q1: What will be the pressure...

Please show how work on how you got this answer. Q1: What will be the pressure (in mmHg) inside of a 50.0 L container that holds 7.00 moles of hydrogen gas at 0.0 C? Q2: Oxygen Gass is produced for use in a small-scale experiment by the catalytic decomposition of hydrogen peroxide: 2 H2O2 (aq) -------------------> 2 H2O (l) + O2 (g) If 50.0 mL of a 1.00 M solution of H2O2 completely decomposes and what volume of dry oxygen...

A company is considering a long term investment project. It will require an investment of $128,300....

A company is considering a long term investment project. It will require an investment of $128,300. Useful life is 4 years. No salvage value. Annual cash inflows would increase $80,300 and annual cash outflows would increase $40,400. The company's required rate of return is 9 percent. Calculate the net present value of this project

For the following question, please show your work. Every number you get, show how you got...

For the following question, please show your work. Every number you get, show how you got it. And please make everything as clear as possible. Thanks in advance. 2. What is the outstanding balance on the following loan after the borrower has made 12.5 years of payments? (For full credit, calculate manually and show all of your work.) (20 pts) Loan amount: $300,000 Term: 25 years Discount Points: 5 Payments: Monthly Interest Rate: 4.5% (annual)

Please show how you got the answers so that I can learn how to do this!...

Please show how you got the answers so that I can learn how to do this! 200.00mL of 2.00 M solution of a weak acid is mixed with 300.00 mL of a 2.00 M solution containing its conjugate base. 50.000 g of the slightly soluble salt silver acetate (AgC2H3O2) is added to this buffer solution. After thorough mixing, the solution is assumed to be saturated. To determine the amount of the solid which remains undissolved, the solution is filtered, and...

There are 3 questions. You must show your work and how you got the answer. PLEASE...

There are 3 questions. You must show your work and how you got the answer. PLEASE DO NOT ANSWER IF YOU ARE NOT SURE You have been asked to look at production options for the Android01, since production methods and allocation of costs have implications for cost per unit. Two alternative methods of production are being considered. Begin by gathering data (using financial information in decision making), then determine the suitability of the project. The production of Android01 will share...

*Please show work on how you got the answer for any calclualtions in Income Statemnet and...

*Please show work on how you got the answer for any calclualtions in Income Statemnet and the Balance sheet. (Also I could not fit the entire Balance sheet chart on it, so it is suppose to be longer) Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter a. As of December 31 (the end of the prior...

(Please show work so I can understand how you got to the answer - Thank you...

(Please show work so I can understand how you got to the answer - Thank you very much ) Via Gelato is a popular neighborhood gelato shop. The company has provided the following data concerning its operations: Fixed Element per Month Variable Element per Liter Actual Total for June Revenue $ 13.00 $ 72,540 Raw materials $ 4.75 $ 30,330 Wages $ 5,700 $ 1.50 $ 14,560 Utilities $ 1,730 $ 0.30 $ 3,800 Rent $ 2,700 $ 2,700 Insurance...

*Please show how you got the calculations. In a reactor scenario, 20.000 g Fe3O4 was reacted,...

*Please show how you got the calculations. In a reactor scenario, 20.000 g Fe3O4 was reacted, at 1450 K, with NO having an initial pressure of 3.000 atm. At equilibrium, the mass of the solid-phase product (Fe2O3) was calculated to be 8.0742 g. 2Fe3O4(s) + 2NO(g) <=> 3Fe2O3(s) + N2O(g) 1. Calculate the mass of each gas-phase species at equilibrium. 2. Calculate the mass of Fe3O4 remaining at equilibrium from the mass of Fe2O3 calculated to exist at equilibrium. 3....

Please show how you got all calculations If McCormick & Company decides to purchase the new...

Please show how you got all calculations If McCormick & Company decides to purchase the new factory in Largo, they need to consider relevent after-tax cash flow. McCormick & Company estimated their potential first-year sales revenue at $780,000, expenses at $225,000, and depreciation expense at $150,000. McCormick's marginal tax rate is 40 percent (21 percent federal and 19 percent state combined). What is first-year relative cash flow? 3. The estimated relevent annual expected cash flows (C1) associated with the puchase...

Subjects