Equity methods. Prepare journal entries for the following transactions, assuming ABC uses the equity method for...
- Equity methods.
Prepare journal entries for the following transactions, assuming ABC uses the equity method for accounting for its investments in XYZ Co.
- At the beginning of the year 2018, ABC bought 20% of XYZ's common stock at its book value. Total book value of all XYZ's common stock was $800,000 on this date.
- During the year 2018, XYZ reported $60,000 of net income and paid $30,000 of dividends.
- During the year 2019, XYZ reported a net loss of $10,000 and paid $5,000 of dividends.
Homework Answers
Journal
| Date | Account title | Debit | Credit |
| 2018 | Stock investment | 160,000 | |
| Cash | 160,000 | ||
| Stock investment (60,000 x 20%) | 12,000 | ||
| Revenue from investment in XYZ Corporation | 12,000 | ||
| Cash (30,000 x 20%) | 6,000 | ||
| Stock investment | 6,000 | ||
| 2019 | Loss from investment in XYZ Corporation | 2,000 | |
| Stock investment (10,000 x 20%) | 2,000 | ||
| Cash (5,000 x 20%) | 1,000 | ||
| Stock investment | 1,000 |
Kindly comment if you need further assistance. Thanks
Add Answer to:
Equity methods.
Prepare journal entries for the following transactions, assuming
ABC uses the equity method for...
Equity methods. Prepare journal entries for the following transactions, assuming ABC uses the equity method for accoun...
Equity methods. Prepare journal entries for the following transactions, assuming ABC uses the equity method for accounting for its investments in XYZ Co. At the beginning of the year 2018, ABC bought 20% of XYZ's common stock at its book value. Total book value of all XYZ's common stock was $800,000 on this date. During the year 2018, XYZ reported $60,000 of net income and paid $30,000 of dividends. During the year 2019, XYZ reported a net loss of $10,000...
Q1. Prepare JEs for the following transactions Assuming a) Fair value method b) equity method 1....
Q1. Prepare JEs for the following transactions Assuming a) Fair value method b) equity method 1. At the beginning of Year 1, Crane bought 30% of Hudson's common stock at its book value. Total book value of all Hudson's common stock was $800,000 on this date. 2. During Year 1, Hudson reported $60,000 of net income and paid $30,000 of dividends. 3. During Year 2, Hudson reported $30,000 of net income and paid $20,000 of dividends. 4. During Year 3,...
Ch 17 in-Class Practice Problem First Name: Last Name: Equity Investments --Fair value and equity methods...
Ch 17 in-Class Practice Problem First Name: Last Name: Equity Investments --Fair value and equity methods Fil in the dollar changes caused in the investment account and Dividend Revenue or Investment Revenue account by each of the following transactions, assuming Crane Company uses (a) the fair value method and (b) the equity method for accounting for its investments in Hudson Company (a) Fair Value Method Investment Dividend Account Revenue (b) Equity Method Investment Investment Account Revenue Transaction 1. At the...
1.) Presented below is information related to Wally Company: Prepare the general journal entries necessary to record the...
1.) Presented below is information related to Wally Company: Prepare the general journal entries necessary to record the following transactions: (a) The company is granted a charter that authorizes issuance of 15,000 shares of $100 par value preferred stock and 40,000 shares of no-par common stock. (b) 12,000 shares of common stock are issued to the founders of the corporation for land valued by the board of directors at $400,000. The board established a stated value of $10 per share...
Question 23 4 pts On 03/01/2019 ABC Company purchased 30% of the stock of XYZ Corporation...
Question 23 4 pts On 03/01/2019 ABC Company purchased 30% of the stock of XYZ Corporation for $6,000,000. How will ABC treat a 2019 cash dividend paid by XYZ to its shareholders? O ABC will record the dividend using the equity method. The dividend will therefore be reported as a reduction in the amount of the investment in XYZ. ABC will record the dividend using the equity method. The dividend will therefore be reported as an increase in the amount...
Prepare Equity section of Balance sheet at 12/31/2xx2 $s Shares 20,000 Data set ABC reported for...
Prepare Equity section of Balance sheet at 12/31/2xx2
$s Shares 20,000 Data set ABC reported for 2XX1 Common stock at par $ 100,000 Additial paid in capital : Common $ 500,000 Perferred stock $ 200,000 Retained earnings $ 650,000 5,000 $ 7.00 perferred dividend per share For 2xx2 ABC recorded Net Income $ 320,000 Issue more common shares on 1/1 Common stock at par $ 50,000 Additial paid in capital : Common $ 300,000 Paid Dividends to common and preferred...
Question 3 (20 points) XYZ Company was established at the beginning of 2019 when several investors...
Question 3 (20 points) XYZ Company was established at the beginning of 2019 when several investors paid a total of $200,000 to purchase XYZ common stock. No additional investments in common stock were made during the year. By December 31, 2019, XYZ had cash on hand of $45,000, office equipment of $40,000, inventory of $156.000 and accounts payable of $10,000. Sales for the year were $812,000. Of this amount, customers still owed $20,000. XYZ declared and paid dividends of $25,000...
Stockholders’ Equity Transactions, Journal Entries, and T-Accounts The stockholders’ equity of Fremantle Corporation at January 1...
Stockholders’ Equity Transactions, Journal Entries, and
T-Accounts
The stockholders’ equity of Fremantle Corporation at January 1
follows:
8 Percent preferred stock, $110 par value, 20,000 shares
authorized; 4,000 shares issued and outstanding
$440,000
Common stock, $4 par value, 10,000 shares
authorized; 40,000 shares issued and outstanding
160,000
Paid-in capital in excess of par value-Preferred stock
200,000
Paid-in capital in excess of par value-Common stock
800,000
Retained earnings
550,000
Total Stockholders' Equity
$2,150,000
The following transactions, among others, occurred during the...
ABC Corp had the following financial data related to the year-end 2018 and 2019. Prepare the...
ABC Corp had the following financial data related to the year-end 2018 and 2019. Prepare the Statement of Cash Flows, as of December 31, 2019, for ABC Corp. Comparative Balance Sheet Data ABC Corp Balance Sheet December 31 2019 2018 Cash $ 142,740 $ 46,080 Accounts Receivable 126,360 58,800 Inventories 146,250 123,420 Long-term Investments 111,800 112,800 Equipment, net 286,000 228,600 $813,150 $ 569,700 Accounts Payable $ 130,000 $ 80,760 Income Tax Payable 21,450 20,400 Bonds Payable 97,500 132,000 Common...
Fair value and equity methods ic) Fair Value and Equity Methods Nadal Corporation purchased 9,000 common...
Fair value and equity methods
ic) Fair Value and Equity Methods Nadal Corporation purchased 9,000 common shares of Beck Inc., on January 1, 2018, for $91,000. During 2018, Beck declared and paid cash dividends to Nadal in the amount of $5,500. Nadal's share of Beck's net income for 2018 was $5,500. At December 31, 2018, the fair value of the 10,000 shares was $98,000. This is Nadal's only investment Required: 1. Assume that Beck has 67,500 common shares optstanding, What...
Q1. Prepare JEs for the following transactions Assuming a) Fair value method b) equity method 1. At the beginning of Year 1, Crane bought 30% of Hudson's common stock at its book value. Total book value of all Hudson's common stock was $800,000 on this date. 2. During Year 1, Hudson reported $60,000 of net income and paid $30,000 of dividends. 3. During Year 2, Hudson reported $30,000 of net income and paid $20,000 of dividends. 4. During Year 3,...
Ch 17 in-Class Practice Problem First Name: Last Name: Equity Investments --Fair value and equity methods Fil in the dollar changes caused in the investment account and Dividend Revenue or Investment Revenue account by each of the following transactions, assuming Crane Company uses (a) the fair value method and (b) the equity method for accounting for its investments in Hudson Company (a) Fair Value Method Investment Dividend Account Revenue (b) Equity Method Investment Investment Account Revenue Transaction 1. At the...
Question 23 4 pts On 03/01/2019 ABC Company purchased 30% of the stock of XYZ Corporation for $6,000,000. How will ABC treat a 2019 cash dividend paid by XYZ to its shareholders? O ABC will record the dividend using the equity method. The dividend will therefore be reported as a reduction in the amount of the investment in XYZ. ABC will record the dividend using the equity method. The dividend will therefore be reported as an increase in the amount...
Prepare Equity section of Balance sheet at 12/31/2xx2
$s Shares 20,000 Data set ABC reported for 2XX1 Common stock at par $ 100,000 Additial paid in capital : Common $ 500,000 Perferred stock $ 200,000 Retained earnings $ 650,000 5,000 $ 7.00 perferred dividend per share For 2xx2 ABC recorded Net Income $ 320,000 Issue more common shares on 1/1 Common stock at par $ 50,000 Additial paid in capital : Common $ 300,000 Paid Dividends to common and preferred...
Question 3 (20 points) XYZ Company was established at the beginning of 2019 when several investors paid a total of $200,000 to purchase XYZ common stock. No additional investments in common stock were made during the year. By December 31, 2019, XYZ had cash on hand of $45,000, office equipment of $40,000, inventory of $156.000 and accounts payable of $10,000. Sales for the year were $812,000. Of this amount, customers still owed $20,000. XYZ declared and paid dividends of $25,000...
Stockholders’ Equity Transactions, Journal Entries, and
T-Accounts
The stockholders’ equity of Fremantle Corporation at January 1
follows:
8 Percent preferred stock, $110 par value, 20,000 shares
authorized; 4,000 shares issued and outstanding
$440,000
Common stock, $4 par value, 10,000 shares
authorized; 40,000 shares issued and outstanding
160,000
Paid-in capital in excess of par value-Preferred stock
200,000
Paid-in capital in excess of par value-Common stock
800,000
Retained earnings
550,000
Total Stockholders' Equity
$2,150,000
The following transactions, among others, occurred during the...
Fair value and equity methods
ic) Fair Value and Equity Methods Nadal Corporation purchased 9,000 common shares of Beck Inc., on January 1, 2018, for $91,000. During 2018, Beck declared and paid cash dividends to Nadal in the amount of $5,500. Nadal's share of Beck's net income for 2018 was $5,500. At December 31, 2018, the fair value of the 10,000 shares was $98,000. This is Nadal's only investment Required: 1. Assume that Beck has 67,500 common shares optstanding, What...
Most questions answered within 3 hours.
-
A
student bought $1000 worth of furniture. What is the equivalent
annual cost if it is...
asked 1 minute ago -
What taboo subject did Ida B. Wells suggest was consensual
between black men and white women?...
asked 1 hour ago -
You have just been hired by the EPA to help with the new gas
mileage standards...
asked 2 hours ago -
4) A firm is hit by increases in its wage rate, w.
a) How does this...
asked 2 hours ago -
A square current loop 5.4 cm on each side carries a 510 mA
current. The loop...
asked 4 hours ago -
What are five tips in conducting knowledge assessment/literature
review research? Each of these tips needs to...
asked 5 hours ago -
Antigen presenting cells link innate and adaptive immune
responses. In the theoretical scenario where phagosomes cannot...
asked 5 hours ago -
Dealing with conflict, in my opinion, is a skill and an art. I
believe that those...
asked 6 hours ago -
6. A long straight wire with circular cross section and radius
1.5 cm carries a 1.2...
asked 6 hours ago -
Deacon Corporation has provided the following financial data
from its balance sheet and income statement:
Year...
asked 7 hours ago -
List and discuss at least three variables from everyday life for
which you expect the variable ...
asked 6 hours ago -
A high-pass filter consists of a 1.60 μF capacitor in series
with a 125 Ω resistor....
asked 7 hours ago