ABC Supplies declared and distributed a property dividend of land to preferred shareholders. The land had a fair value of $100,000 and a carrying value of $105,000. Record the journal entries and include effects on net income, if any.
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ABC Supplies declared and distributed a property dividend of land to preferred shareholders. The land had a fair value of $100,000 and a carrying value of $105,000.
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- 3. During the year, Chinawish Co. distributed property dividends in the form of inventories. The carrying amount on the date of declaration was P2,000,000 and the fair values, which approximated the net realizable values, were P1,600,000 on the date of declaration and P2,200,000 on the date of distribution. Requirement: Provide the journal entries on the dates of declaration and distribution.A tract of land valued at $50,000 has been given to a corporation in exchange for 1,000 preferred shares. Required: a. Prepare the journal entry to record the transaction. b. Where would the transaction be classified in the balance sheet?The Vary Company has total assets with a book value of $3,000,000 and a fair value of $4,000,000. A potential primary beneficiary company has guaranteed the debt of the Vary Company and will receive a share of income of the Vary Company based on contractual terms. The primary beneficiary will also have decision power. a. Will the primary beneficiary company record an investment in the equity of the Vary Company? b. Will the Vary Company need to be consolidated. If it is to be consolidated, what adjustments would be needed in the consolidation process?
- 3. LCX, MRD, and NTJ are partners in LMN Partnership. The partnership contract stipulated that profit or loss shall be divided as follows: Salaries of P175,000 to LCX, P262,500 to MRD, and P350,000 to NTJ; A bonus to NTJ of 10% of profit after deduction of partners' salaries; Remaining profit or loss as follows: 30% to LCX, 40% to MRD, and 30% to NTJ.Determine the amount of the dividends received deduction in each of the followinginstances. In all cases, the net income figure includes the full dividend.a. Dividend of $10,000 from a 45% owned corporation; taxable income before DRDof $50.000.b. Dividend of $19.000 from a 15% owned corporation;taxable income before DRD of$75.000.c. Dividend of $22,000 from a 60% owned corporation; taxable income before DRD ofSI1.000.d. Dividend of $8.000 from a 10% owned corporation; taxable income before DRD of$7.000.Bean Corporation purchased 17% of the outstanding shares of common stock of Williams Corporation as a long-term investment. Subsequently, Williams Corporation reported net income and declared and paid cash dividends. What journal entry would Bean Corporation use to record the purchase of Williams Corporation common stock? debit Investment--Williams Corporation; credit Income of Williams Corporation debit Cash; credit Investment--Williams Corporation debit Cash: credit Dividend Revenue Odebit Investment--Williams Corporation; credit Cash
- A company acquired $50,000 of land by issuing its own shares. This will show . Multiple Choice O O in investing activities. as a disclosure note. in financing activities. in both investing and financing activities.Blanton Corporation purchased 15% of the outstanding shares of common stock of Worton Corporation as a long-term investment. Subsequently, Worton Corporation reported net income and declared and paid cash dividends. What journal entry would Blanton Corporation use to record the dividends it receives?Sunny receives a property distribution from Cloudy Corp. The distributed property had a FMV of $5,000 and a basis of $2,000. Assume Cloudy Corp has positive E&P for the distribution. What is the gain to Cloudy Corp? What is the dividend to Sunny? What is the net adjustment to Cloudy Corp E&P
- Adams Moving and Storage, a family-owned corporation, declared a property dividend of 1,000 shares of GE common stock that Adams had purchased in February for $37,000 as an investment. GE’s shares had a market value of $35 per share on the declaration date. Prepare the journal entries to record the property dividend on the declaration and payment dates.Determine the basis of the property contributed in the hands of the corporation in each instance. Assume that the 80% rule is met in all cases. Required: a. Contribution of property with a basis of $1,800 and an FMV of $2,200. b. Contribution of property with a basis of $4,600 and an FMV of $5,400. The stockholder also received $540 cash from the corporation as part of the stock transaction. c. Contribution of property with a basis of $9,000 and an FMV of $14,100. The stockholder also received property with an FMV of $2,500 from the corporation as part of the stock transaction. d. Contribution of a building with an FMV of $240,000, a mortgage (assumed by the corporation) of $140,000, and a basis of $205,000. e. Contribution of a building with an FMV of $1,780,000, a mortgage (assumed by the corporation) of $1,080,000, and a basis of $675,000. Amount a. Corporation's basis in property b. Corporation's basis in property c. Corporation's basis in property d. Corporation's basis in…b. On November 30 Year 1, a company declared property dividends when the property has a carrying amount of P500,000 and fair value of P520,000. On December 31, Year 1, the fair value less cost to distribute of the property is P480,000. On February 25, the date of payment, the property has fair value less cost to distribute of P470,000. The gain or loss on distribution of the property dividend is