Homework Answers
Add Answer to:
QUESTION 16 In a situation where the investor does not exercises significant influence over the investee,...
Equity method journal entries (price greater than book value) An investor purchases a 30% interest in...
Equity method journal entries (price greater than book value) An investor purchases a 30% interest in an investee company, and the investor concludes that it can exert significant influence over the investee. The book value of the investee's Stockholders' Equity on the acquisition date is $500,000, and the investor purchases its 30% interest for $195,000. The investor is willing to pay the purchase price because the investee owns an unrecorded (internally developed) patent that the investor estimates is worth $150,000....
Equity method journal entries with intercompany sales of inventory An investor owns 25% of an investee,...
Equity method journal entries with intercompany sales of inventory An investor owns 25% of an investee, and accounts for its investment using the equity method. At the beginning of the year, the Equity Investment was reported on the investor's balance sheet at $2,000,000. During the year, the investee reported net income of $800,000 and paid dividends of s200,000. In addition, the investor sold inventory to the investee, realizing a gross profit of $240,000 on the sale. At the end of...
When using the equity method to account for an investment, cash dividends received by the investor...
When using the equity method to account for an investment, cash dividends received by the investor from the investee should be recorded: Multiple Choice As a reduction in the investment account. As an increase in the investment account. As dividend income. As a contra item to stockholders' equity.
An investor owns 25% of an investee, and accounts for its investment using the equity method....
An investor owns 25% of an investee, and accounts for its investment using the equity method. At the beginning of the year, the Equity Investment was reported on the investor's balance sheet at $1,500,000. During the year, the investee reported net income of $600,000 and paid dividends of $150,000. In addition, the investor sold inventory to the investee, realizing a gross profit of $180,000 on the sale. At the end of the year, 30% of the inventory remained unsold by...
Pepper Company owns 40% of the common stock and exercises significant influence over Salt Company. Pepper...
Pepper Company owns 40% of the common stock and exercises significant influence over Salt Company. Pepper Company O A. would file a consolidated financial statement with Salt Company O B. would record dividends received from Salt Company as investment revenue O C. would decrease its investment account when Salt Company declares dividends OD. would record goodwill as investment income each year
Under the equity method, the investor a) debits the Revenue from Investments when the investee reports...
Under the equity method, the investor a) debits the Revenue from Investments when the investee reports income U b) must debit the Equity Investments account when a dividend is received c) must record its share of the investee's net income o d) must use the LIFO method for tax purposes
SHOW ALL WORKINGS The Investor acquired 75% of Investee on January 1, 2020 for $105,000. At...
SHOW ALL WORKINGS
The Investor acquired 75% of Investee on January 1, 2020 for
$105,000. At acquisition the fair value of the noncontrolling
interest was $35,000. Trial Balances for the two entities at
December 21, 2020 are:
Required The book value of the investee's assets are equal to
the fair value except for Building & Equipment which are worth
$25,000 more. Building and Equipment have 10 years of remaining
life at time of acquisition
1. Allocation of Acquisition Value
2....
Equity method journal entries (price equals book value) Prepare journal entries for the transactions below relating...
Equity method journal entries (price equals book value) Prepare journal entries for the transactions below relating to an Equity Investment accounted for using the equity method. a. An investor purchases 14,400 common shares of an investee at $13 per share; the shares represent 25% ownership in the investee and the investor concludes that it can exert significant influence over the investee. b. The investee reports net income of $144,000. c. The investor receives a cash dividend of $1.50 per common...
1. The Investor acquired 75% of Investee on January 1, 2020 for $105,000. At acquisition the...
1. The Investor acquired 75% of Investee on January 1, 2020 for $105,000. At acquisition the fair value of the noncontrolling interest was $35,000. Trial Balances for the two entities at December 31, 2020 are: Investor Investee Debit Credit Debit Credit Cash 68,500 32,000 Accounts Receivable 85,000 14,000 Inventory 97,000 24,000 Land 42,875 25,000 Buildings & Equipment 350,000 150,000 Investment in Subsidary 118,875 Cost of Goods Sold 145,000 114,000 Wage Expense 35,000 20,000 Depreciation Expense 25,000 10,000 Interest Expense 12,000...
Question 6 If the cost method is used to account for a long-term investment in common...
Question 6 If the cost method is used to account for a long-term investment in common stock, dividends received should be credited to the Dividend Revenue account. debited to the Stock Investments account. recorded only when 20% or more of the stock is owned. credited to the Stock Investments account. Question 7 If 10% of the common stock of an investee company is purchased as a long-term investment, the appropriate method of accounting for the investment is determined by agreement...
Equity method journal entries (price greater than book value) An investor purchases a 30% interest in an investee company, and the investor concludes that it can exert significant influence over the investee. The book value of the investee's Stockholders' Equity on the acquisition date is $500,000, and the investor purchases its 30% interest for $195,000. The investor is willing to pay the purchase price because the investee owns an unrecorded (internally developed) patent that the investor estimates is worth $150,000....
Equity method journal entries with intercompany sales of inventory An investor owns 25% of an investee, and accounts for its investment using the equity method. At the beginning of the year, the Equity Investment was reported on the investor's balance sheet at $2,000,000. During the year, the investee reported net income of $800,000 and paid dividends of s200,000. In addition, the investor sold inventory to the investee, realizing a gross profit of $240,000 on the sale. At the end of...
Pepper Company owns 40% of the common stock and exercises significant influence over Salt Company. Pepper Company O A. would file a consolidated financial statement with Salt Company O B. would record dividends received from Salt Company as investment revenue O C. would decrease its investment account when Salt Company declares dividends OD. would record goodwill as investment income each year
Under the equity method, the investor a) debits the Revenue from Investments when the investee reports income U b) must debit the Equity Investments account when a dividend is received c) must record its share of the investee's net income o d) must use the LIFO method for tax purposes
SHOW ALL WORKINGS
The Investor acquired 75% of Investee on January 1, 2020 for
$105,000. At acquisition the fair value of the noncontrolling
interest was $35,000. Trial Balances for the two entities at
December 21, 2020 are:
Required The book value of the investee's assets are equal to
the fair value except for Building & Equipment which are worth
$25,000 more. Building and Equipment have 10 years of remaining
life at time of acquisition
1. Allocation of Acquisition Value
2....
Equity method journal entries (price equals book value) Prepare journal entries for the transactions below relating to an Equity Investment accounted for using the equity method. a. An investor purchases 14,400 common shares of an investee at $13 per share; the shares represent 25% ownership in the investee and the investor concludes that it can exert significant influence over the investee. b. The investee reports net income of $144,000. c. The investor receives a cash dividend of $1.50 per common...
1. The Investor acquired 75% of Investee on January 1, 2020 for $105,000. At acquisition the fair value of the noncontrolling interest was $35,000. Trial Balances for the two entities at December 31, 2020 are: Investor Investee Debit Credit Debit Credit Cash 68,500 32,000 Accounts Receivable 85,000 14,000 Inventory 97,000 24,000 Land 42,875 25,000 Buildings & Equipment 350,000 150,000 Investment in Subsidary 118,875 Cost of Goods Sold 145,000 114,000 Wage Expense 35,000 20,000 Depreciation Expense 25,000 10,000 Interest Expense 12,000...
Most questions answered within 3 hours.
-
Please explain all the options in brief.
In a forest fire, many oak trees were destroyed....
asked 7 minutes ago -
Queuing Theory Problem:
Traffic to a message switching system , arrives in a random
pattern at...
asked 14 minutes ago -
During the past six months, 73.2 percent of US households
purchased sugar. Assume that these expenditures...
asked 25 minutes ago -
Which is a possible value for the principal quantum number
n?
7, 3.14 , 2.5, None...
asked 29 minutes ago -
Everyone loves a helium filled balloon for a party. Do some
basic Internet research and answer...
asked 28 minutes ago -
Here is a pair of aromatic compounds that each have a complicated
set of aromatic peaks....
asked 47 minutes ago -
As with many public goods, determining the appropriate level of
government support for the production of...
asked 50 minutes ago -
Write a balanced chemical equation for the oxidation reaction
between Caro’s acid (H2SO5) and CN– ion...
asked 53 minutes ago -
Calculate the number of valence electrons for
[Mo(C6H6)(CO)3]
asked 1 hour ago -
Which of the following are true about the strength of the
association between two variables?
1-...
asked 1 hour ago -
You are a monopolist and know that your consumers have a linear
demand curve. At what...
asked 59 minutes ago -
Raising a heavy load requires work. Raising it in half the time
requires:
asked 1 hour ago