Homework Answers
Solution a:
| Computation of net income reported by Winston - Cost method | |||
| Particulars | 20X2 | 20X3 | 20X4 |
| Operating income | $100,000.00 | $60,000.00 | $250,000.00 |
| Add: Dividend revenue | $12,000.00 | $24,000.00 | $20,000.00 |
| Net Income | $112,000.00 | $84,000.00 | $270,000.00 |
Solution b:
| Computation of net income reported by Winston - Equity method | |||
| Particulars | 20X2 | 20X3 | 20X4 |
| Operating income | $100,000.00 | $60,000.00 | $250,000.00 |
| Add: Share in income of Fullbright company | $28,000.00 | $16,000.00 | $10,000.00 |
| Net Income | $128,000.00 | $76,000.00 | $260,000.00 |
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Cost versus Equity Reporting Winston Corporation purchased 40 percent of the stock of Fullbright Company on...
Winston Corporation purchased 40 percent of the stock of Fullbright Company on January 1, 20X2, at...
Winston Corporation purchased 40 percent of the stock of Fullbright Company on January 1, 20X2, at underlying book value. During the period of January 1, 20X2, through December 31, 20X4, the market value of Winston's investment in Fullbright's stock increased by $20,000 each year. The companies reported the following operating results and dividend payments during the first three years of intercorporate ownership: Winston Corporation Fullbright Company Year Operating Income Dividends Net Income Dividends 20X2 $ 100,000 $ 40,000 $ 70,000...
Winston Corporation purchased 40 percent of the stock of Fullbright Company on January 1, 20X2, at...
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Winston Corporation purchased 40 percent of the stock of Fullbright Company on January 1, 20X2, at...
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(a) carrying the investment at FAIR VALUE please do not copy others answer, thank you. Chapter...
(a) carrying the investment at FAIR VALUE
please do not copy others answer, thank you.
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Winston Corporation purchased 40 percent of the stock of Fullbright Company on January 1, 20X2, at underlying book value. During the period of January 1, 20X2, through December 31, 20X4, the market value of Winston's investment in Fullbright's stock increased by $20,000 each year. The companies reported the following operating results and dividend payments during the first three years of intercorporate ownership: Year 20X2 20x3 20x4 Winston Corporation Operating Income Dividends $100,000 $ 40,000 60,000 80,000 250,000 120,000 Fullbright Company...
(a) carrying the investment at FAIR VALUE
please do not copy others answer, thank you.
Chapter 2 Reporting Intercorporate Investments and Consolidation of Wholly Owned Subsidiaries with No Differential 85 E2-4 Carrying an Investment at Fair Value versus Equity Method Reporting Winston Corporation purchased 40 percent of the stock of Fullbright Company on January 1, 20X2, at underlying book value. During the period of January 1, 20X2, through December 31, 20X4, the market value of Winston's investment in Fullbright's stock...
Azure Enterprises acquired 80 percent of Brown Corporation's voting common stock on January 1, 20X3, for $392,000. At that date, the fair value of the noncontrolling interest of Brown Corporation was $98,000. Immediately after Azure acquired its ownership, Brown purchased 60 percent of Coral Company's stock for $129,000. The fair value of the noncontrolling interest of Coral Company was $86,000 at that date. During 20X3, Azure reported operating income of $250,000 and paid dividends of $95,000. Brown reported operating income...
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