On January 1, 2020, Mehan, Incorporated purchased 15,000 shares of Cook Company for $150,000 giving Mehan a 15% ownership of Cook. The fair value of the 15% investment was the same as the carrying value of the investment when, on January 1, 2021, Mehan purchased an additional 25,000 shares (25%) of Cook for $300,000. This last purchase gave Mehan the ability to apply significant influence over Cook. The book value of Cook on January 1, 2020 was $1,000,000. The book value of Cook on January 1, 2021, was $1,100,000. Any excess of cost over book value for this second transaction is assigned to a database and amortized over four years.
Cook reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout the years:
| Net Income | Dividends | ||||||||
| 2020 | $ | 200,000 | $ | 50,000 | |||||
| 2021 | 225,000 | 50,000 | |||||||
| 2022 | 250,000 | 60,000 | |||||||
On April 1, 2022, just after its first dividend receipt, Mehan sells 10,000 shares of its investment.
What was the balance in the investment account at April 1, 2022 just before the sale of shares?
The answer is $535,875.
$517,500 + ($25,000 − $625) − $6,000 = $535,875
2022 Beginning Investment Account Balance + (40% of 1st Quarter Income – 1st Quarter Amortization) – 1st Quarter Dividend
My question is how do you get 2022 Beginning Investment Account Balance?
In: Accounting
Cullumber Company has the following stockholders’ equity accounts at December 31, 2020.
| Common Stock ($100 par value, authorized 7,400 shares) | $515,700 | |
| Retained Earnings | 307,900 |
Prepare entries in journal form to record the following transactions, which took place during 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
| (1) | 290 shares of outstanding stock were purchased at $97 per share. (These are to be accounted for using the cost method.) | |
| (2) | A $19 per share cash dividend was declared. | |
| (3) | The dividend declared in (2) above was paid. | |
| (4) | The treasury shares purchased in (1) above were resold at $103 per share. | |
| (5) | 470 shares of outstanding stock were purchased at $105 per share. | |
| (6) | 380 of the shares purchased in (5) above were resold at $96 per share. |
No. | Account Titles and Explanation | Debit | Credit |
| 1. | Treasury Stock | 28130 | |
| Cash | 28130 | ||
| 2. | Retained Earnings | ? | |
| Dividends Payable | ? | ||
| 3. | Dividends Payable | ? | |
| Cash | ? | ||
| 4. | Cash | 29870 | |
| Treasury Stock | 28130 | ||
| Paid-in Capital from Treasury Stock | 1740 | ||
| 5. | Treasury Stock | 49350 | |
| Cash | 49350 | ||
| 6. | Cash | 36480 | |
| Retained Earnings | ? | ||
| Paid-in capital from treasury stock | ? | ||
| Treasury Stock | 39900 |
Prepare the stockholders’ equity section of Cullumber Company’s balance sheet after giving effect to these transactions, assuming that the net income for 2021 was $85,100. State law requires restriction of retained earnings for the amount of treasury stock.(Enter account name only and do not provide descriptive information.)
Cullumber company (Stockholder's equity)
Common Stock 515700
Retained Earnings ?
Total Paid-in capital and Retained Earnings ?
Less: Treasury Stock 9450
Total Stockholder's Equity ?
In: Accounting
Rivera Company has several processing departments. Costs charged to the Assembly Department for November 2020 totaled $2,283,744 as follows.
| Work in process, November 1 | ||||
| Materials | $78,600 | |||
| Conversion costs | 48,700 | $127,300 | ||
| Materials added | 1,592,280 | |||
| Labor | 225,100 | |||
| Overhead | 339,064 |
Production records show that 35,200 units were in beginning work in
process 30% complete as to conversion costs, 661,000 units were
started into production, and 25,400 units were in ending work in
process 40% complete as to conversion costs. Materials are entered
at the beginning of each process.
(a)
Determine the equivalent units of production and the unit production costs for the Assembly Department. (Round unit costs to 2 decimal places, e.g. 2.25.)
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Materials |
Conversion Costs |
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| Equivalent Units | ||||
| Cost per unit |
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$ |
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(b)
Determine the assignment of costs to goods transferred out and in process.
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Transferred out |
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Work in process, November 30 |
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Total costs |
$ |
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(c)
Prepare a production cost report for the Assembly Department. (Round unit costs to 2 decimal places, e.g. 2.25 and other answers to 0 decimal places, e.g. 125.)
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In: Accounting
Colter Company prepares monthly cash budgets. Relevant data from
operating budgets for 2020 are as follows.
|
January |
February |
|||
|---|---|---|---|---|
| Sales | $439,200 | $488,000 | ||
| Direct materials purchases | 146,400 | 152,500 | ||
| Direct labor | 109,800 | 122,000 | ||
| Manufacturing overhead | 85,400 | 91,500 | ||
| Selling and administrative expenses | 96,380 | 103,700 |
All sales are on account. Collections are expected to be 50% in the
month of sale, 30% in the first month following the sale, and 20%
in the second month following the sale. Sixty percent (60%) of
direct materials purchases are paid in cash in the month of
purchase, and the balance due is paid in the month following the
purchase. All other items above are paid in the month incurred
except for selling and administrative expenses that include $1,220
of depreciation per month.
Other data:
| 1. | Credit sales: November 2019, $305,000; December 2019, $390,400. | |
| 2. | Purchases of direct materials: December 2019, $122,000. | |
| 3. | Other receipts: January—Collection of December 31, 2019, notes receivable $18,300; | |
| February—Proceeds from sale of securities $7,320. | ||
| 4. | Other disbursements: February—Payment of $7,320 cash dividend. |
The company’s cash balance on January 1, 2020, is expected to be
$73,200. The company wants to maintain a minimum cash balance of
$61,000.
1- Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February.
2- Prepare a cash budget for January and February in columnar form.
In: Accounting
On December 21, 2020, Bridgeport Company provided you with the
following information regarding its equity investments.
| Securities | Cost | Fair Value | Unrealized
Gain (Loss) |
||||
|---|---|---|---|---|---|---|---|
| SC Corp. stock | $39,100 | 34,980 | $(4,120 | ) | |||
| True Co. stock | 53,500 | 60,060 | 6,560 | ||||
| Plus, Inc. stock | 30,400 | 30,124 | (276 | ) | |||
| Total of portfolio | $123,000 | $125,164 | 2,164 | ||||
| Previous fair value adjustment balance | -0- | ||||||
| Fair value adjustment – Dr. | $2,164 | ||||||
During 2021, the Plus, Inc. stock was sold for $30,940. The fair
value of the stock on December 31, 2021, was: SC Corp.
stock—$36,200; True Co. stock—$55,850. None of the equity
investments result in significant influence.
Prepare the adjusting journal entry needed on December 31, 2020.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required,
select "No Entry" for the account titles and enter 0 for the
amounts.)
Prepare the journal entry to record the sale of the Plus, Inc.
stock during 2021. (Credit account titles are
automatically indented when amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the
account titles and enter 0 for the
amounts.)
Prepare the adjusting journal entry needed on December 31, 2021.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required,
select "No Entry" for the account titles and enter 0 for the
amounts.)
In: Accounting
| Stuart Company Balance Sheet As of January 24, 2020 (amounts in thousands) |
|||
|---|---|---|---|
| Cash | 8,400 | Accounts Payable | 2,800 |
| Accounts Receivable | 4,700 | Debt | 3,400 |
| Inventory | 4,200 | Other Liabilities | 900 |
| Property Plant & Equipment | 17,200 | Total Liabilities | 7,100 |
| Other Assets | 2,800 | Paid-In Capital | 6,700 |
| Retained Earnings | 23,500 | ||
| Total Equity | 30,200 | ||
| Total Assets | 37,300 | Total Liabilities & Equity | 37,300 |
Record the transactions in a journal, transfer the journal entries to T-accounts, compute closing amounts for the T-accounts, and construct a balance sheet to answer the question.
Jan 25. Consume good or service and pay expense of $2,000
Jan 26. Sell product for $40,000 in cash with historical cost of
$32,000
Jan 27. Sell, deliver, and receive payment of $25,000 for
service
What is the final amount in Total Liabilities & Equity?
Note: Transaction amounts are provided in dollars but the balance sheet units are thousands of dollars.
Please specify your answer in the same units as the balance sheet (i.e., enter the number from your updated balance sheet).
Record the transactions in a journal, transfer the journal entries to T-accounts, compute closing amounts for the T-accounts, and construct a balance sheet to answer the question.
In: Accounting
| Stuart Company Balance Sheet As of January 24, 2020 (amounts in thousands) |
|||
|---|---|---|---|
| Cash | 8,400 | Accounts Payable | 2,800 |
| Accounts Receivable | 4,700 | Debt | 3,400 |
| Inventory | 4,200 | Other Liabilities | 900 |
| Property Plant & Equipment | 17,200 | Total Liabilities | 7,100 |
| Other Assets | 2,800 | Paid-In Capital | 6,700 |
| Retained Earnings | 23,500 | ||
| Total Equity | 30,200 | ||
| Total Assets | 37,300 | Total Liabilities & Equity | 37,300 |
Record the transactions in a journal, transfer the journal entries to T-accounts, compute closing amounts for the T-accounts, and construct a balance sheet to answer the question.
Jan 25. Borrow $52,000 from a bank
Jan 26. Purchase equipment for $48,000 in cash
Jan 27. Issue $85,000 in stock
What is the final amount in Total Assets?
In: Accounting
| Gulf Shipping Company Balance Sheet As of January 24, 2020 (amounts in thousands) |
|||
|---|---|---|---|
| Cash | 14,300 | Accounts Payable | 1,900 |
| Accounts Receivable | 4,100 | Debt | 3,200 |
| Inventory | 5,800 | Other Liabilities | 4,000 |
| Property Plant & Equipment | 14,800 | Total Liabilities | 9,100 |
| Other Assets | 700 | Paid-In Capital | 7,700 |
| Retained Earnings | 22,900 | ||
| Total Equity | 30,600 | ||
| Total Assets | 39,700 | Total Liabilities & Equity | 39,700 |
Record the transactions in a journal, transfer the journal entries to T-accounts, compute closing amounts for the T-accounts, and construct a balance sheet to answer the question.
Jan 25. Purchase equipment for $50,000 in cash
Jan 26. Borrow $67,000 from a bank
Jan 27. Issue $80,000 in stock
Jan 28. Buy $16,000 worth of manufacturing supplies on credit
Jan 29. Pay $7,000 owed to a supplier
What is the final amount in Total Equity?
In: Accounting
Colter Company prepares monthly cash budgets. Relevant data from
operating budgets for 2020 are as follows.
|
January |
February |
|||
|---|---|---|---|---|
| Sales | $435,600 | $484,000 | ||
| Direct materials purchases | 145,200 | 151,250 | ||
| Direct labor | 108,900 | 121,000 | ||
| Manufacturing overhead | 84,700 | 90,750 | ||
| Selling and administrative expenses | 95,590 | 102,850 |
All sales are on account. Collections are expected to be 50% in the
month of sale, 30% in the first month following the sale, and 20%
in the second month following the sale. Sixty percent (60%) of
direct materials purchases are paid in cash in the month of
purchase, and the balance due is paid in the month following the
purchase. All other items above are paid in the month incurred
except for selling and administrative expenses that include $1,210
of depreciation per month.
Other data:
| 1. | Credit sales: November 2019, $302,500; December 2019, $387,200. | |
| 2. | Purchases of direct materials: December 2019, $121,000. | |
| 3. | Other receipts: January—Collection of December 31, 2019, notes receivable $18,150; | |
| February—Proceeds from sale of securities $7,260. | ||
| 4. | Other disbursements: February—Payment of $7,260 cash dividend. |
The company’s cash balance on January 1, 2020, is expected to be
$72,600. The company wants to maintain a minimum cash balance of
$60,500.
b) Prepare a cash budget for January and February in columnar form.
In: Accounting
| Gulf Shipping Company Balance Sheet As of March 11, 2020 (amounts in thousands) |
|||
|---|---|---|---|
| Cash | 14,300 | Accounts Payable | 1,900 |
| Accounts Receivable | 4,100 | Debt | 3,200 |
| Inventory | 5,800 | Other Liabilities | 4,000 |
| Property Plant & Equipment | 14,800 | Total Liabilities | 9,100 |
| Other Assets | 700 | Paid-In Capital | 7,700 |
| Retained Earnings | 22,900 | ||
| Total Equity | 30,600 | ||
| Total Assets | 39,700 | Total Liabilities & Equity | 39,700 |
Use T-accounts to record the transactions below, which occur on March 12, 2020, close the T-accounts, and construct a balance sheet to answer the question.
1. Purchase equipment for $50,000 in cash
2. Borrow $67,000 from a bank
3. Issue $80,000 in stock
What is the final amount in Total Equity?
Note: Transaction amounts are provided in dollars but the balance sheet units are thousands of dollars.
Please specify your answer in the same units as the balance sheet (i.e., enter the number from your updated balance sheet).
In: Accounting