Question

1)

Exercise 12-7 (Part Level Submission) On January 1, Zabel Corporation purchased a 25% equity in Helbert Corporation for $186,500. At December 31, Helbert declared and paid a $52,100 cash dividend and reported net income of $195,000. (a) Journalize the transactions. (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 o for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 1 Dec. 31 (To record dividends received) Dec. 31 (To record equity in Helbert Corporation's net income)

2)

3)

4)

Answer 1

1)
12-7)
Journal entries:
				calculation
Date	Acc Title	Debit$	Credit$
1-Jan	Equity investment in Helbert	186500
	Cash		186500
	(equity investment in Helbert of 25%)
31-Dec	Cash	13025		(52100*25%)
	Equity investment in Helbert		13025
	(dividend received)
31-Dec	Equity investment in Helbert	48750		(195000*25%)
	Net Income of Helbert		48750
	(to record equity in Helbert Corp. net income)
2)
12-10)
Journal entries:
Date	Acc Title	Debit	Credit
31-Dec	Unrealised Loss	3800		(53100-49300)
	Trading Securities		3800
	(to record securities at fair value)
3)
12-10)
Journal entries:
Date	Acc Title	Debit	Credit
31-Dec	Loss on Available for Sale securities	4700		(53100-48400)
	Available for Sale investment		4700
	(to record securities at fair value)
4)
12-5)
Correction of wrong entry only please.
Journal entries:
Date	Acc Title	Debit	Credit
1-Dec	Cash	13184
	Stock Investments		11536	(57680*206/1030)
	Gain on Sale of Stock Investment		1648
	(Sale of 206 shares of Escalante)