Case - A | |||
Acquition of 15000 shares of Lisa Company | |||
Date | Particulars | Debit | Credit |
Jan-18 | Marketable Equity shares | $4,50,000 | |
Cash | $4,50,000 | ||
(15000 Shares @ $30) (15000*30) | |||
Recognition of Net income of $240000 of Lisa Company | |||
Date | Particulars | Debit | Credit |
Dec-18 | "No Entry Required" | ||
The income has to be recognized in lisa company books and no entry required in the Investor (Marg company) | |||
Recognition of Dividend paid by Lisa Company | |||
Date | Particulars | Debit | Credit |
Dec-18 | Cash | $4,500 | |
Dividend Revenue | $4,500 | ||
(15000 Shares @ $0.30) (15000*0.30) | |||
Fair Value adjustment of Shares of Lisa Company at the end of the year | |||
Date | Particulars | Debit | Credit |
Dec-18 | Net Loss on Equity securities | $30,000 | |
Marketable Equity shares | $30,000 | ||
Purchase Price per share | $30 | ||
Selling Price per share | $28 | ||
Net loss per share | $2 | ||
No of share | $15,000 | ||
Loss | $30,000 | ||
Case - B | |||
Acquition of 34000 shares of Lisa Company | |||
Date | Particulars | Debit | Credit |
Jan-18 | Investment in Affiliates | $10,20,000 | |
Cash | $10,20,000 | ||
(34000 Shares @ $30) (34000*30) | |||
Marg company acquires 34% share in Lisa company . Lisa will became Affiliate of Marg company | |||
Recognition of Net income of $240000 of Lisa Company | |||
Date | Particulars | Debit | Credit |
Dec-18 | "No Entry Required" | ||
The income has to be recognized in lisa company books and no entry required in the Investor (Marg company) | |||
Recognition of Dividend paid by Lisa Company | |||
Date | Particulars | Debit | Credit |
Dec-18 | Cash | $10,200 | |
Dividend Revenue | $10,200 | ||
(34000 Shares @ $0.30) (34000*0.30) | |||
Fair Value adjustment of Shares of Lisa Company at the end of the year | |||
Date | Particulars | Debit | Credit |
Dec-18 | Equity in Affiliates earnings | $68,000 | |
Marketable Equity shares | $68,000 | ||
Purchase Price per share | $30 | ||
Selling Price per share | $28 | ||
Net loss per share | $2 | ||
No of share | $34,000 | ||
Loss | $68,000 | ||
Case A | Case B | ||
Marketable Equity securities | $4,20,000 | ||
Investment in Affiliates | $10,20,000 | ||
Dividend Revenue | $4,500 | $10,200 | |
Net gain (Loss) on Equity shares | -$30,000 | ||
Equity in Affiliates earnings | -$68,000 |
QZ Appendix D Saved Help Save & Exit Submit Required information [The following information applies to...
Required information [The following information applies to the questions displayed below.] Lisa Company had outstanding 150,000 shares of common stock. On January 10, 2018, Marg Company purchased a block of these shares in the open market at $28 per share, with the intent of holding the shares for a long time. At the end of 2018, Lisa reported net income of $370,000 and cash dividends of $0.20 per share. At December 31, 2018, Lisa Company stock was selling at $27...
Required information [The following information applies to the questions displayed below.] Company T had 35,000 outstanding shares of common stock, par value $14 per share. On January 1 of the current year, Company P purchased some of Company T's shares as a long-term investment at $24 per share. At the end of the current year, Company T reported the following: income, $50,000, and cash dividends declared during the year, $21,500. The fair value of Company T stock at the end...
Saved Help Save & Exit Submit Exercise 6-21 (Algo) Long-term contract; revenue recognition over time; loss projected on entire project (LO6-9) On February 1, 2021, Arrow Construction Company entered into a three year construction contract to build a bridge for a price of $8,390,000. During 2021, costs of $2.130,000 were incurred with estimated costs of $4,130,000 yet to be incurred. Billings of $2,630,000 were sent, and cash collected was $2,380,000. In 2022, costs incurred were $2,630,000 with remaining costs estimated...
Required information [The following information applies to the questions displayed below.] In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2020. Information related to the contract is as follows: 2020 $1,940,400 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2018 $2,604,000 5,796,000 2,040,000 1,820,000 2019 $4,032,000 1,764,000 4,596,000 4,000,000 3,364,000 4,180,000...
mework i Saved Help Save & Exit Check my Required Information [The following information applies to the questions displayed below.] The transactions listed below are typical of those involving New Books Inc. and Readers' Corner. New Books is a wholesale merchandiser and Readers' Corner is a retail merchandiser. Assume all sales of merchandise from New Books to Readers' Corner are made with terms n/30, and the two companies use perpetual inventory systems. Assume the following transactions between the two companies...
Help Save & Exit Submit Check my work E6-21 (Algo) Recording, Reporting, and Evaluating a Bad Debt Estimate Using the Percentage of Credit Sales Method LO6-2. During the current year, Robby's Camera Shop had sales revenue of $157,000, of which $57,000 was on credit. At the start of the current year, Accounts Receivable showed a $19,000 debit balance and the Allowance for Doubtful Accounts showed a $1,800 credit balance. Collections of accounts receivable during the current year amounted to $60,000....
The journal has to be done for all years! ! Required information (The following information applies to the questions displayed below.) In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows: Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2021 $2,640,000 6,160,000 2,080,000...
Saved Help Save & Exit Check Required information [The following information applies to the questions displayed below.] The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson company uses a perpetual inventory system. It categorizes the following accounts as selling expenses: Depreciation Expense-Store Equipment, Sales Salaries Expense, Rent Expense-Selling Space, Store Supplies Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative. NELSON COMPANY Unadjusted Trial Balance January 31 Credit Debit $ 17,...
The following information applies to the questions displayed below In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for 10,000,000. The road was completed in 2020. Information related to the contract is as follows: 2020 2019 2,542,000 $3,772,000 $2,074,600 1,886,000 2,020,000 4,294,000 3,686,000 1,810,000 3,800,000 4,390,000 2018 Cost incurred during the year Estimated costs to complete as of year-end Billinga during the year Cash collections during the year 5, 658,000 Westgate...
Company T had 32,000 outstanding shares of common stock, par value $10 per share. On January 1 of the current year, Company P purchased some of Company T’s shares as a long-term investment at $23 per share. At the end of the current year, Company T reported the following: income, $48,000, and cash dividends declared during the year, $19,500. The fair value of Company T stock at the end of the current year was $20 per share. 2-a. Prepare the...