Question

In: Accounting

Fair value and equity methods. Prepare journal entries for the following transactions, assuming ABC uses (a)...

Fair value and equity methods. Prepare journal entries for the following transactions, assuming ABC uses (a) the fair value method and (b) the equity method for accounting for its investments in XYZ Co. a. At the beginning of Year 2014, ABC bought 20% of XYZ's common stock at its book value. Total book value of all XYZ's common stock was $800,000 on this date. b. During Year 2014, XYZ reported $60,000 of net income and paid $30,000 of dividends. c. During Year 2015, XYZ reported a net loss of $10,000 and paid $5,000 of dividends.

Solutions

Expert Solution

Above figures have been calculated in the following manner:

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Write the journal entries for the following transactions under both equity method and fair value method....
Write the journal entries for the following transactions under both equity method and fair value method. Transaction 1: (1/1/2001) Company A invests $700,000 (cash) in the investee Company B. Fair value method: Equity method: Transaction 2:At the end of the year (12/31/2001), there is a $20,000 difference between market value and book value of the investment (FV>BV). Fair value method: Equity method: Transaction 3: At the end of the year (12/31/2001), company B reports $100,000 profit. Fair value method (assuming...
Prepare general journal entries for the following transactions of Norman Company, assuming they use the allowance...
Prepare general journal entries for the following transactions of Norman Company, assuming they use the allowance method to account for uncollectible accounts. Apr 01 Sold $3,500 of merchandise to Lance Co., receiving an 8%, 90-day, $3,500 note. 15 Wrote off $1,500 owed by Guy Co. from a previous period sale. 30 Received a $5,000, 6%, 30-day note receivable from James Co. as settlement for its $5,000 account receivable. May 30 The note received from James on April 30 was collected...
Prepare journal entries to record the following transactions for a retail store. The company uses a...
Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system and the gross method.    Apr. 2 Purchased $3,300 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point. 3 Paid $240 cash for shipping charges on the April 2 purchase. 4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $800. 17 Sent a check to Lyon Company...
Prepare journal entries to record the following transactions for a retail store. The company uses a...
Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system and the gross method.    Apr. 2 Purchased $3,200 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point. 3 Paid $300 cash for shipping charges on the April 2 purchase. 4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $650. 17 Sent a check to Lyon Company...
Prepare journal entries to record the following transactions for a retail store. The company uses a...
Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system and the gross method.    Apr. 2 Purchased $5,800 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point. 3 Paid $380 cash for shipping charges on the April 2 purchase. 4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $850. 17 Sent a check to Lyon Company...
Prepare journal entries for the transactions
Presented below are selected transactions of Molina Company. Molina sells in large quantities to other companies and also sells its product in a small retail outlet.   March 1 Sold merchandise on account to Dodson Company for $10,400, terms 3/10, n/30. March 3  Dodson Company returned merchandise worth $200 to Molina. March 9 Molina collected the amount due from Dodson Company from the March 1 sale. March 15 Molina sold merchandise for $1,000 in its retail outlet. The customer used...
Prepare General Journal Entries for the following transactions. Then post the journal entries to the General...
Prepare General Journal Entries for the following transactions. Then post the journal entries to the General Ledger provided and then prepare an Unadjusted Trial Balance. March 1​Dunlop invested $30,000 cash and buildings worth $150,000 in the company March 2​The company rented equipment by paying $2,000 cash for the first month’s (March) rent. March 5​The company purchased $2,400 of office supplies for cash. March 10​The company paid $7,200 cash for the premium on a 12-month insurance policy. Coverage begins on March...
Prepare journal entries to record the following merchandising transactions of Cabela’s, which uses the perpetual inventory...
Prepare journal entries to record the following merchandising transactions of Cabela’s, which uses the perpetual inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable—Boden.) July 1 Purchased merchandise from Boden Company for $6,100 under credit terms of 2/15, n/30, FOB shipping point, invoice dated July 1. 2 Sold merchandise to Creek Co. for $950 under credit terms of 2/10, n/60, FOB shipping...
Prepare journal entries to record the following merchandising transactions of Lou’s, which uses the perpetual inventory...
Prepare journal entries to record the following merchandising transactions of Lou’s, which uses the perpetual inventory system and the gross method. Hint: It will help to identify each receivable and payable; for example, record the purchase on August 1 in Accounts Payable—Aron.    Aug. 1 Purchased merchandise from Aron Company for $5,000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. 5 Sold merchandise to Baird Corp. for $3,500 under credit terms of 2/10, n/60, FOB destination,...
Prepare journal entries to record the following merchandising transactions of Cabela’s, which uses the perpetual inventory...
Prepare journal entries to record the following merchandising transactions of Cabela’s, which uses the perpetual inventory system and the gross method. Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable—Boden. July 1 Purchased merchandise from Boden Company for $6,500 under credit terms of 2/15, n/30, FOB shipping point, invoice dated July 1. 2 Sold merchandise to Creek Co. for $950 under credit terms of 2/10, n/60, FOB shipping...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT