Date | Account name | Debit | Credit |
---|---|---|---|
Jan 1, 2020 | Investment in towne corp common stock(24,000* 30%* $15) | 108,000 | |
To cash | 108,000 | ||
(To record investment purchase) | |||
Dec 30,2020 | Cash ($6400*30%) | 1,920 | |
To Investment in towne corp | 1,920 | ||
(To record receipt of dividends ) | |||
Dec 31,2020 | Investment in towne corp($19,200*30%) | 5,760 | |
To Income of Towne corp | 5,760 | ||
(To record proportionate share of investee's net income) |
b. Effects of investment in 2020
Income statement | 2020 |
---|---|
Other revenues and gains (dividends) | 1,920 |
Balance sheet, Dec 31 | 2020 |
---|---|
Assets | |
Cash | -106,080 |
Common stock of towne corp. | 108,000 |
Recording Entries for Equity Investment: Equity Method On January 1, 2020, Allen Corporation purchased 30% of...
On January 1, 2020, Allen Corporation purchased 30% of the 15,000 outstanding common shares of Towne Corporation at $15 per share as a long-term investment. On the date of purchase, the book value and the fair value of the net assets of Towne Corporation were equal. During the year, Towne Corporation reported net income of $12,000. Towne Corporation declared and paid cash dividends of $4,000 on December 30, 2020, to shareholders on record. As of December 31, 2020, common shares...
Question 4 Not complete Marked out of 22.00 P Flag question Recording Entries for Equity Investment: Equity Method On January 1, 2020, Allen Corporation purchased 30% of the 60,000 outstanding common shares of Towne Corporation at $15 per share as a long-term investment. On the date of purchase, the book value and the fair value of the net assets of Towne Corporation were equal. During the year, Towne Corporation reported net income of $48,000. Towne Corporation declared and paid cash...
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Equity Method for Stock Investment On January 4, Year 1, Ferguson Company purchased 90,000 shares of Silva Company directly from one of the founders for a price of $40 per share. Silva has 250,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $221,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $841,000 for the year. Ferguson uses the equity method in accounting for its investment in...
On January 1, 2020, Sunland Corporation had the following stockholders' equity accounts. Common Stock ($24 par value, 65,000 shares issued and outstanding) Paid-in Capital in Excess of Par-Common Stock Retained Earnings $1,560,000 191,000 591,000 During the year, the following transactions occurred. Feb. 1 Mar. 1 Apr. 1 July 1 Declared a $1 cash dividend per share to stockholders of record on February 15, payable March 1. Paid the dividend declared in February. Announced a 2-for-1 stock split. Prior to the...