don't give answer in image Required information[The following information applies to the questions displayed below.)Felicia Company acquired 22,000 of the 55,000 shares of outstanding common stock of Nueces Corporation as a longterm investment. The annual accounting period for both companies ends December 31. The following transactionsoccurred during the year:Jan. 10 Purchased 22,000 shares of Nueces common stock at $14 per share.Dec. 31 Nueces Corporation reported net income of $104,000.Dec. 31 Nueces Corporation declared and paid a cash dividend of 50.70 per share.Dec. 31 Determined the fair value of Nueces stock to be $13 per share.3. Show how the long-term investment and the related revenue should be reported on the financial statements of Felicia Company.FELICIA COMPANYBalance SheetLong-term Investments.Income Statement

Accounting method:The rules and regulation followed by the company for the purpose of reporting…

Answered: Required information [The following…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 14RE

See similar textbooks

Similar questions

Felicia Company acquired 21,000 of the 60,000 shares of outstanding common stock of NuecesCorporation as a long-term investment. The annual accounting period for both companies endsDecember 31. The following transactions occurred during the year:Jan. 10 Purchased 21,000 shares of Nueces common stock at $12 per share.Dec. 31 Nueces Corporation reported net income of $90,000.Dec. 31 Nueces Corporation declared and paid a cash dividend of $0.60 per share.Dec. 31 Determined the fair value of Nueces stock to be $11 per share.Required:1. What accounting method should the company use? Why?2. Give the journal entries for each of these transactions. If no entry is required, explain why.3. Show how the long-term investment and the related revenue should be reported on the financial statements of Felicia Company.
Princeton Company acquired some of the 50,000 outstanding shares of the common stock of CoxCorporation as trading securities. The accounting period for both companies ends December 31.Give the journal entries for each of the following transactions:July 2 Purchased 8,000 shares of Cox common stock at $28 per share.Dec. 15 Cox Corporation declared and paid a cash dividend of $2 per share.31 Determined the fair value of Cox stock to be $29 per share
On January 1, Vienna Corporation purchased 40% of the outstanding common stock of the Marietta Corporation for $137,500. During the year, Marietta Corporation reported net income of $50,000 and paid cash dividends of $25,000.The balance of the Investment in the Marietta Corporation account on the books of Vienna Corporation at year-end is: Select one: A. $147,500 B. $135,000 C. $100,000 D. $110,000
! Required information [The following information applies to the questions displayed below.] As a long-term investment, Fair Company purchased 20% of Midlin Company's 160,000 shares for $192,000 at the beginning of the reporting year of both companies. During the year, Midlin earned net income of $121,000 and distributed cash dividends of $0.20 per share. At year-end, the fair value of the shares is $200,000. 2. Assume significant influence was acquired. How will the investment in Midlin Company be reflected in the balance sheet and income statement of Fair Company at year-end? Balance Sheet (Partial) Income Statement (Partial)
Carla, Inc. purchased 1,810 shares of Oneida Corporation common stock for $84,600. During the year. Oneida paid a cash dividend of $1.10 per share. At year-end, Oneida stock was selling for $43.90 per share. Prepare Carla's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) (a) (b) (c) Account Titles and Explanation Debit Credit
Selk Steel Company, which began operations in Year 1, had the following transactions and events in its long-term investments. Year 1 January 5 Selk purchased 60,000 shares (20% of total) of Kildaire's common stock for $1,560,000. October 23 Kildaire declared and paid a cash dividend of $3.20 per share. December 31 Kildaire's net income for the year is $1,164,000, and the fair value of its stock at December 31 is $30.00 per share. Year 2 October 15 Kildaire declared and paid a cash dividend of $2.60 per share. December 31 Kildaire's net income for the year is $1,476,000, and the fair value of its stock at December 31 is $32.00 per share. Year 3 January 2 Selk sold 3% (equal to 1,800 shares) of its investment in Kildaire for $54,200 cash.
Selk Steel Company, which began operations in Year 1, had the following transactions and events in its long-term investments.Year 1 January 5 Selk purchased 40,000 shares (20% of total) of Kildaire's common stock for $1,400,000. October 23 Kildaire declared and paid a cash dividend of $3.80 per share. December 31 Kildaire’s net income for the year is $1,170,000, and the fair value of its stock at December 31 is $42 per share. Year 2 October 15 Kildaire declared and paid a cash dividend of $2.70 per share. December 31 Kildaire’s net income for the year is $1,181,000, and the fair value of its stock at December 31 is $46 per share. Year 3 January 2 Selk sold 2% (equal to 800 shares) of its investment in Kildaire for $67,400 cash. Assume that although Selk owns 20% of Kildaire’s outstanding stock, circumstances indicate that it does not have a significant influence over the investee.Required:Prepare journal entries to record the preceding transactions and events…
Kramer Corporation had the following long-term Investment transactions. Prepare the journal entries Kramer Corporation should record for these transactions and events. Jan 2 Purchased 5,000 shares of Optic, Inc. for $42 per share plus $7,000 in fees and commission. These shares represent a 35% ownership of Optic. Oct 15 Received Optic, Inc. cash dividend of $2 per share. Dec 31 Optic reported a net income of $66,000 for the year.
On January 1, Aivah Company purchased 2,000 common shares (25%) of Maywood Corporation as a long-term investment for $235,000. Later in the year, Maywood paid $23,000 in total cash dividends on December 15 and reported net income of $74,000 for the year ended December 31. Determine the amount reported as an equity method investment on Aivah's December 31 balance sheet. Balance

Recommended textbooks for you

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

SWFT Comprehensive Vol 2020

Accounting

ISBN:

9780357391723

Author:

Maloney

Publisher:

Cengage

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

SWFT Comprehensive Vol 2020

Accounting

ISBN:

9780357391723

Author:

Maloney

Publisher:

Cengage

SEE MORE TEXTBOOKS