Homework Answers
| 1] | Investment in affiliate | $ 7,00,000 | |
| Cash | $ 7,00,000 | ||
| [To record purchase] | |||
| 2] | Investment in affiliate [320000*40%] | $ 1,28,000 | |
| Equity income in affiliate | $ 1,28,000 | ||
| [To record equity income] | |||
| 3] | Cash [70000*40%] | $ 28,000 | |
| Investment in affiliate | $ 28,000 | ||
| [To record cash dividend] |
On January 1, 2021, Cullumber Company, a public company, purchased 30% of the common shares of Triple Titanium Inc. for $500,000. The remaining shares (70%) are held by the family members of the company’s founder. Cullumber considers this a strategic investment and a critical step into developing consumer markets. Triple Titanium is currently a supplier to Cullumber. Cullumber placed two members on the 10-person board of directors of Triple Titanium and the two members believe they have been influential on the board through the year. Cullumber and Triple Titanium both have December 31 year ends.
During 2021, Triple Titanium reported profit of $230,000 and paid total dividends of $85,000.
Prepare the following journal entries for Cullumber, assuming significant influence does exist. (Credit account titles are automatically indented when the 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.) Date Account Titles and Explanation Debit Credit Question Part Score --/0.3 During 2022, Triple Titanium reports profit of $220,000 and pays total dividends of $70,000. Date Account Titles and Explanation Debit Credit Question Part Score --/0.3 Determine the balance in the investment account on December 31, 2021, and December 31, 2022. Question Part Score --/0.2 Show how the investment account and related revenue accounts would be reported on the financial statements for December 31, 2021.1. The acquisition of the investment 2. Investment revenue and receipt of dividends related to the investment 2021 (To record purchase of investment.) 2021 (To record dividend received from associate.) 2021 (To record investment income from associate.) eTextbook and Media
Prepare the required journal entries related to these transactions on Cullumber’s books. (Credit account titles are automatically indented when the 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.)2022 (To record dividend received from associate.) 2022 (To record investment income from associate.) eTextbook and Media
2021 2022 Ending balance $ $ eTextbook and Media
CULLUMBER COMPANY
Balance Sheet (Partial)CULLUMBER COMPANY
Income Statement (Partial)eTextbook and Media
On January 1, 2021, Cullumber Company, a public company, purchased 30% of the common shares of Triple Titanium Inc. for $500,000. The remaining shares (70%) are held by the family members of the company’s founder. Cullumber considers this a strategic investment and a critical step into developing consumer markets. Triple Titanium is currently a supplier to Cullumber. Cullumber placed two members on the 10-person board of directors of Triple Titanium and the two members believe they have been influential on the board through the year. Cullumber and Triple Titanium both have December 31 year ends.
During 2021, Triple Titanium reported profit of $230,000 and paid total dividends of $85,000.
Prepare the following journal entries for Cullumber, assuming significant influence does exist. (Credit account titles are automatically indented when the 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.) Date Account Titles and Explanation Debit Credit Question Part Score --/0.3 During 2022, Triple Titanium reports profit of $220,000 and pays total dividends of $70,000. Date Account Titles and Explanation Debit Credit Question Part Score --/0.3 Determine the balance in the investment account on December 31, 2021, and December 31, 2022. Question Part Score --/0.2 Show how the investment account and related revenue accounts would be reported on the financial statements for December 31, 2021.1. The acquisition of the investment 2. Investment revenue and receipt of dividends related to the investment 2021 (To record purchase of investment.) 2021 (To record dividend received from associate.) 2021 (To record investment income from associate.) eTextbook and Media
Prepare the required journal entries related to these transactions on Cullumber’s books. (Credit account titles are automatically indented when the 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.)2022 (To record dividend received from associate.) 2022 (To record investment income from associate.) eTextbook and Media
2021 2022 Ending balance $ $ eTextbook and Media
CULLUMBER COMPANY
Balance Sheet (Partial)CULLUMBER COMPANY
Income Statement (Partial)eTextbook and Media
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On January 1, 2021, Cullumber Company, a public company, purchased 40% of the common shares of...
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On January 1, 2020, Culver Corporation purchased 20% of the
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$21,500. Prepare the entries for Culver to record the purchase and
any additional entries related to this investment in Larkspur
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when amount is entered. Do not indent manually. If no entry is
required, select "No Entry" for the account titles and...
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