Journal Entries - Adair Cookie Corporation | |||
Date | Particulars | Debit | Credit |
1-Jan | Investment in SP's Fine Food Inc. Dr | $400,980.00 | |
To Cash | $400,980.00 | ||
(To record investment in SP food) | |||
31-Dec | Investment in SP's Fine Food Inc. Dr | $20,400.00 | |
To Investment Income | $20,400.00 | ||
(To record share of income in SP) | |||
31-Dec | Cash Dr | $7,830.00 | |
To Investment in SP's Fine Food Inc. | $7,830.00 | ||
(To record dividend received) |
Acair Cookie Corporation purchased 30% of the 326.000 outstanding shares of SP's Fine Foods, Inc. on...
Problem 4 (20 pts) On January 1, 2020, Jordan Inc. purchased 30% of the outstanding common stock of Melody Corporation at a cost of $600,000. Melody Corporation had 800,000 shares of common stock outstanding. At the date of purchase, the book value of Melody's net assets was $1,500,000. Book value and fair value of net assets were the same for all balance sheet items except for machinery and inventory. The fair value exceeded the book value by $200,000 for machinery...
Swifty, Inc. purchased 30% of Nadal Corporation’s 31,000 outstanding common shares at a cost of $15 per share on January 3, 2017. The purchase price of $15 per share was based solely on the book value of Nadal’s net assets. On September 21, Nadal declared and paid a cash dividend of $40,600. On December 31, Swifty’s year end, Nadal reported net income of $88,000 for the year. Nadal shares had a fair value of $14.75 per share at December 31....
Problem 4 (20 pts) On January 1, 2020, Jordan Inc. purchased 25% of the outstanding common stock of Melody Corporation at a cost of $450,000. Melody Corporation had 400,000 shares of common stock outstanding. At the date of purchase, the book value of Melody's net assets was $1,500,000. Book value and fair value of net assets were the same for all balance sheet items except for machinery and inventory. The fair value exceeded the book value by $100,000 for machinery...
As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 470,000 shares for $550,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC’s net assets were equal. During the year, AMC earned net income of $320,000 and distributed cash dividends of 20 cents per share. At year-end, the fair value of the shares is $582,000. Required: 1. Assume no significant influence was acquired. Prepare...
1. Cullumber Corporation purchased 400 shares of Sherman Inc. common stock for $14,100 (Cullumber does not have significant influence). During the year, Sherman paid a cash dividend of $3.25 per share. Assume the stock is nonmarketable. Prepare Cullumber’s journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) 2. On January 1, 2017, Metlock Corporation purchased 40% of the common...
On January 1, 2016, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Inc. for $429,000 cash. The acquisition-date fair value of the noncontrolling interest was $47,700. At January 1, 2016, Star’s net assets had a total carrying amount of $333,900. Equipment (eight-year remaining life) was undervalued on Star’s financial records by $54,400. Any remaining excess fair value over book value was attributed to a customer list developed by Star (four-year remaining life), but not recorded on...
4. On January I, Chester Inc. acquires \(100 \%\) of Festus Corp.'s outstanding common stock by issuing 100,000 shares of Chester's \(\$\) I par value common voting stock. In addition, Chester paid \(\$ 1,800,000\) in cash. Chester also incurred direct combination costs of \(\$ 350,000\) and stock issuance costs of \(\$ 650,000\).On January \(1,\) Chester's voting common stock had a market value of \(\$ 35.50\) per share. Festus' voting common shares were selling for \(\$ 12.50\) pr share. Festus' balances on...
As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 500,000 shares for $580,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC’s net assets were equal. During the year, AMC earned net income of $350,000 and distributed cash dividends of 25 cents per share. At year-end, the fair value of the shares is $615,000. Required: 1. Assume no significant influence was acquired. Prepare...
1. Sol Corporation acquired 10% of the 100,000 ordinary shares of C Electronics at a total cost of $15 per share on Dec 1, 2018. On December 30, C Electronics declared and paid a $50,000 dividend. On December 31, C Electronics reported net income of $200,000 for the year. At December 31, the market price of C Electronics was $18 per share. (a) If the share investment is classified as "trading" Please prepare all the necessary journal entries for 2018...
16 10 points On January 1, 2020. Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company for $1.297.100 in cash. The price paid was proportionate to Sellinger's total fair value, although at the acquisition date. Sellinger had a total book value of $1.510.000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaining life) that was undervalued on Sellinger's accounting records by $333.000. On January 1, 2021. Palka...