Homework Answers
Journal entries
(Amount in $)
| Transaction | General Journal | Debit | Credit |
| 1 | Investment in Seida Corporation | 6,41,000 | |
| Cash | 6,41,000 | ||
| ( To record acquisition of seida's stock) | |||
| 2 | Investment in Seida Corporation ** | 1,36,800 | |
| Equity income-Investment in Seida | 1,36,800 | ||
| ( To income from seida for 2021) | |||
| 3 | Equity income-Investment in Seida | 3,125 | |
| Investment in Seida | 3,125 | ||
| ( To record amortization for 2021) | |||
| 4 | Dividends receivable *** | 40,000 | |
| Investment in Seida | 40,000 | ||
| ( To record dividend declaration for seida) | |||
| 5 | Cash | 40,000 | |
| Dividends receivable | 40,000 | ||
| ( To record collection of dividend from investee) |
Calculation annual amortization
(Amount in $)
| Reference | Particulars | Amount |
| a | Purchase price of 30% of Seida’s stock | 6,41,000 |
| b | Fair value of original 10% investment in Seida | 2,08,000 |
| [20,80,000x10%= 208,000] | ||
| c=a+b | Total fair value of 40% investment in Seida | 8,49,000 |
| d | Book value of Seida stock | 7,72,000 |
| [$19,30,000 × 40%] | ||
| e=c-d | Fair value in excess of book value | 77,000 |
| f | Excess cost assigned to undervalued land | 52,000 |
| ($130,000 × 40%) | ||
| g=e-f | Trademark | 25,000 |
| h | Remaining life of Trademark | 8 years |
| g/h | Annual amortization | 3125 |
Equity income-Investment in Seida ** $3,42,000*40%= $1,36,800
Dividend *** $100,000*40% = $40,000
Add Answer to:
Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2020, for $195,000 and appropriately...
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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, Inc., acquired 10 percent of Seida Corporation on January 1, 2017, for $200,000 and appropriately...
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...
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Journal Entries Include 1. Investment In Seida Cash 2. Investment in Seida Equity Income in Investment...
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
Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2017, for $199,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2018, Milani purchased an additional 30 percent of Seida for $655,000 which resulted in significant...
PLEASE PUT SOLUTION IN THE SAME FORMAT AS THE IMAGE. THANK YOU! On January 1, 2021,...
PLEASE PUT SOLUTION IN THE SAME FORMAT AS THE IMAGE.
THANK YOU!
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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...
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Pretzelmania, Inc., issues 5%, 10-year bonds with a face amount
of $53,000 for $53,000 on January 1, 2021. The market interest rate
for bonds of similar risk and maturity is 5%. Interest is paid
annually on December 31.
Required: 1. & 2. Record the bond issue and first interest payment on December 31, 2021. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1...
On January 1, 2021, Twister Enterprises, a manufacturer of a
variety of transportable spin rides, issues $430,000 of 6% bonds,
due in 20 years, with interest payable semiannually on June 30 and
December 31 each year.
2. If the market interest rate is 7%, the bonds will issue at
$384,087. Record the bond issue on January 1, 2021, and the first
two semiannual interest payments on June 30, 2021, and December 31,
2021. (If no entry is required for a...
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
Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2017, for $199,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2018, Milani purchased an additional 30 percent of Seida for $655,000 which resulted in significant...
PLEASE PUT SOLUTION IN THE SAME FORMAT AS THE IMAGE.
THANK YOU!
On January 1, 2021, S&S Corporation invested in LLB Industries' negotiable two-year, 8% notes, with interest receivable quarterly. The company classified the investment as available-for-sale. S&S entered into a two-year interest rate swap agreement on January 1, 2021, and designated the swap as a fair value hedge. Its intent was to hedge the risk that general interest rates will decline, causing the fair value of its investment to...
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