Journal Entries Include
1. Investment In Seida
Cash
2. Investment in Seida
Equity Income in Investment in Seida
3. Equity Income in Investment in Seida
Investment in Seida
4. Dividend receivable
Investment in Seida
5. Cash
Dividend Receivable
Account Titles and Explanation | Debit | Credit | |
Investment in Seida | $ 6,55,000 | ||
Cash | $ 6,55,000 | ||
(Being Investment recoded) | |||
Investment in Seida ($282000 X 40%) | $ 1,12,800 | ||
Equity income in Investment in Seida | $ 1,12,800 | ||
(Being Income recorded) | |||
Equity income in Investment in Seida | $ 8,625 | ||
Investment in Seida | $ 8,625 | ||
(Being Amortization of trademarks recorded) | |||
Dividend receivable ($119000 X 40%) | $ 47,600 | ||
Investment in Seida | $ 47,600 | ||
(Being dividend payable recorded) | |||
Dividend receivable | $ 47,600 | ||
Cash | $ 47,600 | ||
(Being dividend paid recorded) | |||
Workings: | |||
Purchase Price Seida Stock - 30% | = | $ 6,55,000 | |
Add: | Fair Value of Seida Investment - 10% ($1980000 X 10%) | = | $ 1,98,000 |
Total Fair Value in Seida - 40% | = | $ 8,53,000 | |
Less: | Book Value of Seida Stock - 40% ($1830000 X 40%) | = | $ 7,32,000 |
Fair value in excess | = | $ 1,21,000 | |
Less: | Cost assigned to undervalued Land ($130000 X 40%) | = | $ 52,000 |
(a) | Trademark Value | = | $ 69,000 |
(b) | Remaining life of Trademarks | = | 8 years |
(a) / (b) | Annual Amortization | = | $ 8,625 |
The last jouranl entry needs to be in the oposite order, the debit is to cash becuase they are being paid and the credit is to dividends receivable because they need reverse the receivble now that they received it
Journal Entries Include 1. Investment In Seida Cash 2. Investment in Seida Equity Income in Investment...
Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2017, for $200,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2018, Milani purchased an additional 30 percent of Seida for $644,000 which resulted in significant influence over Seida. On that date, the fair value of Seida's common stock was $1,920,000 in total. Seida's January 1, 2018 book value equaled $1,770,000, although land was undervalued by $138,000. Any additional excess fair value over Seida's...
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...
Milani acquire 10% of Seida Corp. on January 1, 2017, for 190,000 and appropriately accounted for the investment using the fair-value method. On January1, 2018. Milany purchased an additional 30% of Seida for $600,000 which resulted in significant influence over Seida. On that day, the fair value of Seida's common stock was $2,000,000 in total. Seida's January1, 2018, book value equaled $1,850,000, although land was undervalued by $120,000. Any additional excess fair value over Seida's book value attributable to trademark...
Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2020, for $195,000 and appropriately accounted for the investment using the fair-value method On January 1, 2021, Milani purchased an additional 30 percent of Seida for $641000 which resulted in significant influence over Seida. On that date, the fair value of Seida's common stock was $2,080,000 in total. Seida's January 1, 2021, book value equaled $1.930,000, although land was undervalued by $130,000. Any additional excess fair value over Selda's...
This is all the information provided: Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2017, for $190,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2018, Milani purchased an additional 30 percent of Seida for $600,000 which resulted in significant influence over Seida. On that date, the fair value of Seida’s common stock was $2,000,000 in total. Seida’s January 1, 2018, book value equaled $1,850,000, although land was undervalued by $120,000. Any...
Paxton, Inc., acquired 10 percent of Bethlehem Corporation on January 1, Year 10, for $190,000 and appropriately accounted for the investment using the fair-value method. On January 1, Year 11, Paxton purchased an additional 30 percent of Bethlehem for $600,000 which resulted in significant influence over Bethlehem. On that date, the fair value of Bethlehem’s common stock was $2,000,000 in total. Bethlehem’s January 1, Year 11, book value equaled $1,850,000, although land was undervalued by $120,000. Any additional excess fair...
Consolidation at date of acquisition (purchase price greater than book value, acquisition journal entries Assume that the parent company acquires its subsidiary by exchanging 84,000 shares of its $2 par value Common Stock, with a fair value on the acquisition date of $41 per share, for all of the outstanding voting shares of the investee. In its analysis of the investee company, the parent values all of the subsidiary’s assets and liabilities at an amount equaling their book values except...
show the solution as well The Equity Method of Accounting for Investments 31 17. On January 1. 2018, Alamar Corporation acquired a 40 percent interest in Burks, Inc., for $210.000 On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $360,000 During 2018, Burks reported net income of $80,000 and declared and paid cash dividends of $25,000. Alamar sold inventory costing $30,000 to Burks during 2018 for $40.000. Burks used all of this...
Need help with the ones I got incorrect please The options for the journal entry are: Cash Dividend income Dividend receivable Dividends payable Equity in investee income Goodwill Inventory Investment in Burma inc Notes payable Retained earnings Sales Saved Help Save&Exit Submit ck my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question Problem 1-17 (LO 1-3, 1-6) disclosed net assets with n acquired...
Accounts Available: Accumulated Other Comprehensive Income Allowance for Investment Impairment Bond Investment at Amortized Cost Cash Dividend Receivable Dividend Revenue FV-NI Investments FV-OCI Investments Gain on Sale of Investments GST Receivable Interest Expense Interest Income Interest Payable Interest Receivable Investment in Associate Investment Income or Loss Loss on Discontinued Operations Loss on Impairment Loss on Sale of Investments No Entry Note Investment at Amortized Cost Other Investments Recovery of Loss from Impairment Retained Earnings Unrealized Gain or Loss - OCI...