1) If P Co. uses equity method, the entry to record net loss reported by S Co. in year 2019 will include: *
a) Credit Cash $27,000
b) Debit Equity Loss $27,000
c) Debit Equity Income $27,000
d) Debit Investment in S Co $27,000
2) If P Co. uses cost method, the entry to record distributed dividend by S Co. in year 2018 will include: *
a) Credit Investment in S Co. $45,000
b) Debit Cash $45,000
c) Credit Investment in S Co. $50,000
d) Debit Cash $50,000
3)If P Co. uses cost method, the entry to record distributed dividend by S Co. in year 2019 will include: *
a)Credit Equity in Subsidiary Income $13,500
b)Credit Investment in S Co. $13,500
c)Credit Dividend Income $13,500
d)Credit Cash $13,500
Homework Answers
Question 1:
Option B. Debit Equity Loss $27,000
Loss = 30,000*90% = $ 27,000
Question 2:
Option B. Debit Cash $45,000
As the cost method of accounting is followed, any dividend income has to be recognised seperately.
Question 3:
Option C. Credit Dividend Income $13,500
As the cost method of accounting is followed, any dividend income has to be recognised seperately.
Entry will be
Debit Cash 13500
Credit Dividend Income 13500
Add Answer to:
1) If P Co. uses equity method, the entry to record
net loss reported by S...
1) The journal entry to record the net income reported by S Co. in the books...
1) The journal entry to record the net income reported
by S Co. in the books of P Co. will include: *
a) Credit Equity in Subsidiary Income $400,000
b) Credit Equity in Subsidiary Income $320,000
c) Credit Investment in S Co. $400,000
d) Credit Investment in S Co. $320,000
2)The eliminating entries required to prepare consolidated
financial statements on Dec 31, 2019 will include: *
a)Credit Noncontrolling Interest in Equity $300,000
b)Credit Noncontrolling Interest in Equity
$200,000
c)Credit Investment...
Winston Corporation owns 25% of the voting stock of Tole Corporation and uses the equity method...
Winston Corporation owns 25% of the voting stock of Tole Corporation and uses the equity method in recording the investment. Tole Corporation reported a $50,000 net loss. Winston Corporation's entry would include a a. debit to the cash account for $12,500. b. debit to the investment account for $12,500. c. debit to the investment account for $50,000. d. credit to the investment account for $12,500.
Question 22 (4 points) Smith, Inc. uses the Simple Equity Method to account for the net...
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1. Prepare entry S to eliminate stockholders' equity accounts of subsidiary. 2. Prepare entry A to...
1. Prepare entry S to eliminate stockholders' equity accounts of
subsidiary.
2. Prepare entry A to recognize goodwill portion of the original
acquisition fair value.
3. Prepare entry I to eliminate intra-entity income accrual for
the current year based on the parent's usage of the partial equity
method.
4. Prepare entry D to eliminate intra-entity dividend
transfers.
5. Prepare entry E.
6. Prepare entry *C.
7. Prepare entry S to eliminate beginning of year stockholders'
equity accounts of subsidiary—the retained...
Questions: 1. Prepare entry S to eliminate stockholders' equity accounts of subsidiary. 2. Prepare entry A...
Questions:
1. Prepare entry S to eliminate stockholders' equity accounts of
subsidiary.
2. Prepare entry A to recognize allocations attributed to fair
value of specific accounts at acquisition date with residual fair
value recognized as goodwill.
3. Prepare entry I to eliminate $122,500 income accrual for 2017
less $11,000 amortization recorded by parent using equity
method.
4. Prepare entry D to eliminate intra-entity dividend
transfers.
5. Prepare entry E to recognize current year amortization
expense.
6. Prepare entry S to...
Only need help with Part C. On January 1, 2017, Plutonium Corporation acquired 80% of the...
Only need help with Part C.
On January 1, 2017, Plutonium Corporation acquired 80% of the outstanding stock of Sulfurst Inc. for $244,100 cash. The following balance sheet shows Sulfurst Inc.'s book values immediately prior to acquisition, as we as the appraised values of its assets and liabilities by Plutonium's experts. Sulfurst Inc.'s Sulfurst Inc.'s Market Values Book Values Current assets $84,900 $84,900 Property, plant & equipment: Land 79,400 98,900 Building & machinery (net) 162,100 162,100 Total assets $326,400 Total...
1 Prepare entry S to eliminate stockholders' equity accounts of subsidiary. 2 Prepare entry A to...
1
Prepare entry S to eliminate stockholders' equity accounts of
subsidiary.
2
Prepare entry A to recognize goodwill portion of the original
acquisition fair value.
3
Prepare entry I to eliminate intra-entity income accrual for the
current year based on the parent's usage of the partial equity
method.
4
Prepare entry D to eliminate intra-entity dividend
transfers.
5
Prepare entry E.
6
Prepare entry *C.
7
Prepare entry S to eliminate beginning of year stockholders'
equity accounts of subsidiary—the retained...
Prepare entry S to eliminate stockholders' equity accounts of subsidiary. 2 Prepare entry A to recognize...
Prepare entry S to eliminate stockholders' equity accounts of
subsidiary.
2
Prepare entry A to recognize allocations determined above in
connection with acquisition-date fair values.
3
Prepare entry I to eliminate intra-entity dividend declarations
recorded by parent as income.
4
Prepare entry E to recognize 2017 amortization expense.
5
Prepare entry *C to convert parent company figures to equity
method by recognizing subsidiary's increase in book value for prior
year [$117,500 net income less $15,000 dividend declaration] and
excess amortizations...
P Company acquired 75 percent of S Company on January 1, 2018 at book value. During...
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Percy Company uses the complete equity method to record its investment. The difference between book value...
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1) The journal entry to record the net income reported
by S Co. in the books of P Co. will include: *
a) Credit Equity in Subsidiary Income $400,000
b) Credit Equity in Subsidiary Income $320,000
c) Credit Investment in S Co. $400,000
d) Credit Investment in S Co. $320,000
2)The eliminating entries required to prepare consolidated
financial statements on Dec 31, 2019 will include: *
a)Credit Noncontrolling Interest in Equity $300,000
b)Credit Noncontrolling Interest in Equity
$200,000
c)Credit Investment...
Question 22 (4 points) Smith, Inc. uses the Simple Equity Method to account for the net income of Redstone, Inc., a company Smith, Inc. owns 100 % of the outstanding stock of. When Redstone, Inc. reports quarterly Net Income of $80,000 on 6/30/19, Smith, Inc. will: a) Debit the Investment and Credit Investment Income $80,000 b) Debit Investment Income and Credit the Inivestment $80,000 O c) Smith, Inc. will make no journal entry resulting from this transaction d) Debit Dividends...
1. Prepare entry S to eliminate stockholders' equity accounts of
subsidiary.
2. Prepare entry A to recognize goodwill portion of the original
acquisition fair value.
3. Prepare entry I to eliminate intra-entity income accrual for
the current year based on the parent's usage of the partial equity
method.
4. Prepare entry D to eliminate intra-entity dividend
transfers.
5. Prepare entry E.
6. Prepare entry *C.
7. Prepare entry S to eliminate beginning of year stockholders'
equity accounts of subsidiary—the retained...
Questions:
1. Prepare entry S to eliminate stockholders' equity accounts of
subsidiary.
2. Prepare entry A to recognize allocations attributed to fair
value of specific accounts at acquisition date with residual fair
value recognized as goodwill.
3. Prepare entry I to eliminate $122,500 income accrual for 2017
less $11,000 amortization recorded by parent using equity
method.
4. Prepare entry D to eliminate intra-entity dividend
transfers.
5. Prepare entry E to recognize current year amortization
expense.
6. Prepare entry S to...
Only need help with Part C.
On January 1, 2017, Plutonium Corporation acquired 80% of the outstanding stock of Sulfurst Inc. for $244,100 cash. The following balance sheet shows Sulfurst Inc.'s book values immediately prior to acquisition, as we as the appraised values of its assets and liabilities by Plutonium's experts. Sulfurst Inc.'s Sulfurst Inc.'s Market Values Book Values Current assets $84,900 $84,900 Property, plant & equipment: Land 79,400 98,900 Building & machinery (net) 162,100 162,100 Total assets $326,400 Total...
1
Prepare entry S to eliminate stockholders' equity accounts of
subsidiary.
2
Prepare entry A to recognize goodwill portion of the original
acquisition fair value.
3
Prepare entry I to eliminate intra-entity income accrual for the
current year based on the parent's usage of the partial equity
method.
4
Prepare entry D to eliminate intra-entity dividend
transfers.
5
Prepare entry E.
6
Prepare entry *C.
7
Prepare entry S to eliminate beginning of year stockholders'
equity accounts of subsidiary—the retained...
Prepare entry S to eliminate stockholders' equity accounts of
subsidiary.
2
Prepare entry A to recognize allocations determined above in
connection with acquisition-date fair values.
3
Prepare entry I to eliminate intra-entity dividend declarations
recorded by parent as income.
4
Prepare entry E to recognize 2017 amortization expense.
5
Prepare entry *C to convert parent company figures to equity
method by recognizing subsidiary's increase in book value for prior
year [$117,500 net income less $15,000 dividend declaration] and
excess amortizations...
Percy Company uses the complete equity method to record its
investment. The difference between book value of equity acquired
and the value implied by the purchase price was attributed solely
to an excess of market over book values of depreciable assets, with
a remaining life of 10 years.
Exercise 4-1 Percy Company purchased 80% of the outstanding voting shares of Song Company at the beginning of 2014 for $406,000. At the time of purchase, Song Company's total stockholders' equity amounted...
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