Emory Company purchased 15% of Milsaps at a cost of $300,000 on January 1, 2016. At...

Emory Company purchased 15% of Milsaps at a cost of $300,000 on January 1, 2016. At the time, there was no significant influence and the securities were considered available for sale. Milsaps reported earnings in 2016 of $100,000 and paid dividends of $40,000. At the end of 2016, the value of Milsap’s stock held by Emory had risen to $385,000.

Record the journal entries for 2016 on the books of Emory regarding the events of Milsaps.

Dr. Cr.+

Assume the same facts in problem number 3 above, except that Emory purchased 25%of Milsap’s for $300,000 and has significant influence.

Record the journal entries for 2016 on the books of Emory regarding the events of Milsaps.

Dr. Cr

Expert Solution

	Emory Company purchased 15% of Milsaps

	Journal entry for the year end 31december 2016


DATE	PARTICULARS	DEBIT ($)	CREDIT($)
1-Jan-16	15% Investemnt A/C Dr	300000
	To Cash A/C		300000
	(being stock purchased)


31-Dec-16	Cash A/C Dr	6000
	15% Investment A/C		6000
	(Being dividend recd ( 40000*15%)

31-Dec-16	15% Investment A/C Dr	15000
	To Investment Income Account		15000
	(share of profit recd (100000*15%)

31-Dec-16	15% Investment A/C Dr	85000
	To unrealised Gain A/C		85000
	(being investment increse as per fair value method)





	Emory Company purchased 25% of Milsaps
DATE	PARTICULARS	DEBIT ($)	CREDIT($)
1-Jan-16	25% Investemnt in Milsaps A/C Dr	300000
	To Cash A/C		300000
	(being stock purchased)


31-Dec-16	Cash A/C Dr	10000
	25% Investment A/C		10000
	(Being dividend recd ( 40000*25%)

31-Dec-16	15% Investment A/C Dr	25000
	To Investment Income Account		25000
	(share of profit recd (100000*25%)

ekkarill92 answered 1 year ago

Wardell Company purchased a mainframe on January 1, 2016, at a cost of $40,000. The computer...

Wardell Company purchased a mainframe on January 1, 2016, at a cost of $40,000. The computer was depreciated using the straight-line method over an estimated five-year life with an estimated residual value of $4,000. On January 1, 2018, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $400. Required: 1. Prepare the year-end journal entry for depreciation in 2018. No depreciation was recorded during the year. 2....

On January 1, 2016, the Harold Company purchased equipment at a cost of $400,000. The equipment...

On January 1, 2016, the Harold Company purchased equipment at a cost of $400,000. The equipment was expected to have a service life of 10 years and a $20,000 residual value. The company’s fiscal year-end is December 31, and the double-declining balance (DDB) depreciation method is used. During 2018, the company switched from the DDB to the straight-line method. In 2018, the adjusting entry to depreciation expense is: a. $22,500 b. $29,500 c. $31,625 d. $44,775

Wardell Company purchased a minicomputer on January 1, 2016, at a cost of $43,000. The computer...

Wardell Company purchased a minicomputer on January 1, 2016, at a cost of $43,000. The computer was depreciated using the straight-line method over an estimated five-year life with an estimated residual value of $10,000. On January 1, 2018, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $1,600. Required: 1. Prepare the year-end journal entry for depreciation in 2018. No depreciation was recorded during the year. 2....

Wardell Company purchased a minicomputer on January 1, 2016, at a cost of $58,000. The computer...

Wardell Company purchased a minicomputer on January 1, 2016, at a cost of $58,000. The computer was depreciated using the straight-line method over an estimated five-year life with an estimated residual value of $10,000. On January 1, 2018, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $2,200. Required: 1. Prepare the year-end journal entry for depreciation in 2018. No depreciation was recorded during the year. 2....

Wardell Company purchased a minicomputer on January 1, 2016, at a cost of $47,000. The computer...

Wardell Company purchased a minicomputer on January 1, 2016, at a cost of $47,000. The computer was depreciated using the straight-line method over an estimated five-year life with an estimated residual value of $5,000. On January 1, 2018, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $3,800. Required: 1. Prepare the year-end journal entry for depreciation in 2018. No depreciation was recorded during the year. 2....

Wardell Company purchased a mainframe on January 1, 2016, at a cost of $48,000. The computer...

Wardell Company purchased a mainframe on January 1, 2016, at a cost of $48,000. The computer was depreciated using the straight-line method over an estimated five-year life with an estimated residual value of $3,000. On January 1, 2018, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $1,200. Required: 1. Prepare the year-end journal entry for depreciation in 2018. No depreciation was recorded during the year. 2....

Wardell Company purchased a mini computer on January 1, 2016, at a cost of $48,500. The...

Wardell Company purchased a mini computer on January 1, 2016, at a cost of $48,500. The computer has been depreciated using the straight-line method over an estimated five-year useful life with an estimated residual value of $5,000. On January 1, 2018, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $900. Required: 1. Prepare the appropriate adjusting entry for depreciation in 2018 to reflect the revised estimate....

On January 1, 2016, Verlin Co. purchased new machinery for $300,000. The machinery has an estimated...

On January 1, 2016, Verlin Co. purchased new machinery for $300,000. The machinery has an estimated useful life of ten years, and depreciation is computed by the sum-of-the-years'-digits method. 20,000 Salvage. A) The accumulated depreciation on this machinery at December 31, 2017 is __________. Please prepare/show the journal entries for 12/31/2016; 12/31/2017; and 12/31/2018.

1.On January 15, 2016, Bravo Company purchased $1,500 of construction supplies to last for 3 months...

1.On January 15, 2016, Bravo Company purchased $1,500 of construction supplies to last for 3 months on account, from the Zulu Company. Prepare Bravo Company's general journal entry (without explanation). 2. On January 15, 2016, Bravo Company purchased $3,000 of construction supplies to last for 3 months, from the Zulu Company. Bravo paid for half of the supplies with cash and the remainder on account. 3. On January 31, 2016, Bravo withdrew $3,000 from the company. Prepare the general journal...

1. On January 1, 2016 Du Lac Company purchased office equipment that cost $16,000 cash. The...

1. On January 1, 2016 Du Lac Company purchased office equipment that cost $16,000 cash. The equipment had a five year useful life and a $1,200 expected salvage value. Using straight line depreciation, determine the amount of depreciation expense and the amount of accumulated depreciation that would appear on the December 31, 2018 financial statements. A) $2,960 / $2,960. B) $2,608 / $7,824. C) $2,960 / $8,880. D) $2,600 / $7,800. Input the Letter answer from above 2. On January...

Question