Callas Corporation paid $380,000 to acquire 40 percent ownership
of Thinbill Company on January 1, 20X9. The amount paid was equal
to Thinbill’s underlying book value. During 20X9, Thinbill reported
operating income of $45,000 and income of $20,000 from gains on
derivative contracts that were designated as cash flow hedges, so
these gains were reported in Other Comprehensive Income (OCI).
Thinbill paid dividends of $9,000 on December 10, 20X9.
Required:
a. Give all journal entries that Callas Corporation recorded in
20X9, associated with its investment in Thinbill Company.
(If no entry is required for a transaction/event, select
"No journal entry required" in the first account
field.)
b. Give all closing entries at December 31, 20X9, associated with its investment in Thinbill Company. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Homework Answers
Add Answer to:
Callas Corporation paid $380,000 to acquire 40 percent ownership
of Thinbill Company on January 1, 20X9....
Ravine Corporation purchased 40 percent ownership of Valley Industries for $116,400 on January 1, 20X6, when...
Ravine Corporation purchased 40 percent ownership of Valley Industries for $116,400 on January 1, 20X6, when Valley had capital stock of $246,000 and retained earnings of $45,000. The following data were reported by the companies for the years 20X6 through 20X9: Dividends Declared Operating Income, Net Income, Valley Year Ravine Corporation Valley Industries Ravine 20X6 20X7 20X8 20X9 $149,000 94,000 224,000 169,000 $41,000 61,000 10,000 51,000 $ 74,000 $31,000 74,000 94,000 104,000 51,000 40,000 31,000 Required: a. What net income...
Power Corporation acquired 100 percent ownership of Scrub Company on February 12, 20X9. At the date...
Power Corporation acquired 100 percent ownership of Scrub Company on February 12, 20X9. At the date of acquisition, Scrub Company reported assets and liabilities with book values of $438,000 and $172,000, respectively, common stock outstanding of $86,000, and retained earnings of $180,000. The book values and fair values of Scrub's assets and liabilities were identical except for land, which had increased in value by $17,000, and inventories, which had decreased by $8,000. Required: a. Prepare the following consolidation entries required...
Reden Corporation purchased 30 percent of Montgomery Company’s common stock on January 1, 20X9, at underlying...
Reden Corporation purchased 30 percent of Montgomery Company’s
common stock on January 1, 20X9, at underlying book value of
$195,600. Montgomery’s balance sheet contained the following
stockholders’ equity balances:
Preferred Stock $4 par value, 42,000 shares issued and outstanding) Common Stock ($1 par value, 134,000 shares issued and outstanding) Additional Paid-In Capital Retained Earnings Total Stockholders' Equity $ 168,000 134,000 196,000 322,000 $820,000 Montgomery's preferred stock is cumulative and pays a 5 percent annual dividend. Montgomery reported net income of...
Pirate Corporation purchased 100 percent ownership of Ship Company on January 1, 20X5, for $281,000. On...
Pirate Corporation purchased 100 percent ownership of Ship Company on January 1, 20X5, for $281,000. On that date, the book value of Ship's reported net assets was $212,000. The excess over book value paid is attributable to depreciable assets with a remaining useful life of 5 years. Net income and dividend payments of Ship in the following periods were as shown below: Year 20X5 20X6 20x7 Net Income $27,000 47,000 27,000 Dividends $ 7,000 17,000 38,000 Required: Prepare journal entries...
A. Purse Corporation acquired 70 percent of Scarf Corporation's ownership on January 1, 20X8, for $148,400....
A. Purse Corporation acquired 70 percent of Scarf Corporation's ownership on January 1, 20X8, for $148,400. At that date, Scarf reported capital stock outstanding of $126,000 and retained earnings of $86,000, and the fair value of the noncontrolling interest was equal to 30 percent of the book value of Scarf. During 20X8, Scarf reported net income of $33,600 and comprehensive income of $39,600 and paid dividends of $28,600. Required: a. Present all equity-method entries that Purse would have recorded in...
Purse Corporation acquired 70 percent of Scarf Corporation’s ownership on January 1, 20X8, for $145,600. At...
Purse Corporation acquired 70 percent of Scarf Corporation’s ownership on January 1, 20X8, for $145,600. At that date, Scarf reported capital stock outstanding of $124,000 and retained earnings of $84,000, and the fair value of the noncontrolling interest was equal to 30 percent of the book value of Scarf. During 20X8, Scarf reported net income of $32,400 and comprehensive income of $38,400 and paid dividends of $27,400. Required: 1. Present all equity-method entries that Purse would have recorded in accounting...
Palmer Corporation acquired 70 percent of Krown Corporation’s ownership on January 1, 20X8, for $148,400. At...
Palmer Corporation acquired 70 percent of Krown Corporation’s ownership on January 1, 20X8, for $148,400. At that date, Krown reported capital stock outstanding of $126,000 and retained earnings of $86,000, and the fair value of the noncontrolling interest was equal to 30 percent of the book value of Krown. During 20X8, Krown reported net income of $33,600 and comprehensive income of $39,600 and paid dividends of $28,600. Required: a. Present all equity-method entries that Palmer would have recorded in...
Pistol Corporation purchased 100 percent ownership of Scope Products on January 1, 20X6, for $60,000, at...
Pistol Corporation purchased 100 percent ownership of Scope Products on January 1, 20X6, for $60,000, at which time Scope Products reported retained earnings of $12,000 and capital stock outstanding of $29,000. The differential was attributable to patents with a life of four years. Income and dividends of Scope Products were Year 20x6 20x7 20X8 Net Income $23,000 31,000 39,000 Dividends $ 8,000 10,000 10,000 Required: 1. Prepare the equity method entries that Pistol should record to account for this investment...
Softball Corporation reported the following balances at January 1, 20X9: Item Book Value Fair Value Cash...
Softball Corporation reported the following balances at January 1, 20X9: Item Book Value Fair Value Cash $ 55,000 $ 55,000 Accounts Receivable 61,000 61,000 Inventory 115,000 138,000 Buildings and Equipment 306,000 244,000 Less: Accumulated Depreciation (163,000 ) Total Assets $ 374,000 $ 498,000 Accounts Payable $ 56,000 $ 56,000 Common Stock ($9 par value) 82,000 Additional Paid-In Capital 25,000 Retained Earnings 211,000 Total Liabilities and Equities $ 374,000 On January 1, 20X9, Pitcher Corporation purchased 100 percent of Softball's stock....
Milani, Inc, acquired 10 percent of Seida Corporation on January 1, 2017, for $192,000 and appropriately...
Milani, Inc, acquired 10 percent of Seida Corporation on January 1, 2017, for $192,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2018, Milani purchased an additional 30 percent of Seida for $638,000 which resulted in significant influence over Seida. On that date, the fair value of Seida's common stock was $1,970,000 in total. Seida's January 1, 2018 book value equaled $1,820,000, although land was undervalued by $139,000. Any additional excess fair value over Seida's...
Ravine Corporation purchased 40 percent ownership of Valley Industries for $116,400 on January 1, 20X6, when Valley had capital stock of $246,000 and retained earnings of $45,000. The following data were reported by the companies for the years 20X6 through 20X9: Dividends Declared Operating Income, Net Income, Valley Year Ravine Corporation Valley Industries Ravine 20X6 20X7 20X8 20X9 $149,000 94,000 224,000 169,000 $41,000 61,000 10,000 51,000 $ 74,000 $31,000 74,000 94,000 104,000 51,000 40,000 31,000 Required: a. What net income...
Power Corporation acquired 100 percent ownership of Scrub Company on February 12, 20X9. At the date of acquisition, Scrub Company reported assets and liabilities with book values of $438,000 and $172,000, respectively, common stock outstanding of $86,000, and retained earnings of $180,000. The book values and fair values of Scrub's assets and liabilities were identical except for land, which had increased in value by $17,000, and inventories, which had decreased by $8,000. Required: a. Prepare the following consolidation entries required...
Reden Corporation purchased 30 percent of Montgomery Company’s
common stock on January 1, 20X9, at underlying book value of
$195,600. Montgomery’s balance sheet contained the following
stockholders’ equity balances:
Preferred Stock $4 par value, 42,000 shares issued and outstanding) Common Stock ($1 par value, 134,000 shares issued and outstanding) Additional Paid-In Capital Retained Earnings Total Stockholders' Equity $ 168,000 134,000 196,000 322,000 $820,000 Montgomery's preferred stock is cumulative and pays a 5 percent annual dividend. Montgomery reported net income of...
Pirate Corporation purchased 100 percent ownership of Ship Company on January 1, 20X5, for $281,000. On that date, the book value of Ship's reported net assets was $212,000. The excess over book value paid is attributable to depreciable assets with a remaining useful life of 5 years. Net income and dividend payments of Ship in the following periods were as shown below: Year 20X5 20X6 20x7 Net Income $27,000 47,000 27,000 Dividends $ 7,000 17,000 38,000 Required: Prepare journal entries...
Pistol Corporation purchased 100 percent ownership of Scope Products on January 1, 20X6, for $60,000, at which time Scope Products reported retained earnings of $12,000 and capital stock outstanding of $29,000. The differential was attributable to patents with a life of four years. Income and dividends of Scope Products were Year 20x6 20x7 20X8 Net Income $23,000 31,000 39,000 Dividends $ 8,000 10,000 10,000 Required: 1. Prepare the equity method entries that Pistol should record to account for this investment...
Milani, Inc, acquired 10 percent of Seida Corporation on January 1, 2017, for $192,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2018, Milani purchased an additional 30 percent of Seida for $638,000 which resulted in significant influence over Seida. On that date, the fair value of Seida's common stock was $1,970,000 in total. Seida's January 1, 2018 book value equaled $1,820,000, although land was undervalued by $139,000. Any additional excess fair value over Seida's...
Most questions answered within 3 hours.
-
(Expected rate of return and risk) Carter Inc. is evaluating a
security. Calculate the investment’s expected...
asked 2 hours ago -
What specific indicators can point to lack of progress for
African Americans in American society?
asked 3 hours ago -
1-The Electrons in a beam are moving at 2.7×108 m/s in an
electric field of 15000...
asked 3 hours ago -
A gas tank is a vertical cylinder. It has a radius of 1m, a
height of...
asked 4 hours ago -
Accent Software faces the following conditions. All of these
support Accent’s use of a market-penetration pricing...
asked 5 hours ago -
A mathematically inclined friend emails you the following
instructions: "Meet me in the cafeteria the first...
asked 5 hours ago -
A monopoly sells in two countries . The demand curves in the two
countries are p1...
asked 6 hours ago -
A .15kg rubber ball is bounced off a wall. Before hitting the
wall, the ball moves...
asked 6 hours ago -
A manufacturing company preparing to build a new plant is
considering three potential locations for it....
asked 6 hours ago -
B. If compound Y has approximately the same values of solubility
in toluene as compound X,...
asked 7 hours ago -
Oscar Inc. has inventory in Japan valued at 39,051,000 Yen one
year ago. One year ago...
asked 7 hours ago -
If Canada suffered from "fundamental disequilibrium," and its
government choose not to devalue its currency, a...
asked 7 hours ago