On January 2, 2023, Ayayai Corp. purchased 200 of the 1000 outstanding common shares of Wildhorse Ltd. for $57000. During 2023, Wildhorse declared total cash dividends of $7000 and reported net income for the year of $40000. If Ayayai uses the cost model to account for its investment in Wildhorse, Ayayai's Investment in Wildhorse Ltd. account at December 31, 2023 should be O $55600. O $57000. O $63600. O $65000.
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- On January 1, 2020 Rosen Company purchased 35,000 which is 15% of the total common stock owned by Polo Corporation for 770,000. During 2020 Polo Corporation reported a net profit of 400,000 and declared a dividend of 100,000. Requested: (a) If Rosen Company records its investment using the cost method (there is no significant effect), prepare the journal entry that Rosen Company should record in relation to the investment made. (b) Suppose that Rosen Company has significant influence in Polo Corporation so that Rosen Company must record its investment using the equity method, prepare the journal entry that Rosen company must present in relation to the value of its investment, and present the calculation of the investment balance as of December 31, 2020Suppose that AXE company acquires exactly 25% of the voting common stock of Company SARDAR Inc. for $3,000,000 at the beginning of the year 2020. Pfizer company reports $1,200,000 earnings for the year in its net income and pays $550,000 in cash dividends at the end of the year 2020. 1. Using the cost method, what is the investment income and the balance sheet investment account balance respectively for AXE company? * A) $137,500, $3,000,000 B) $300,000; $3,162,500 C) $137,500; $2,300,000 D) None of the above. 2. Using the equity method, what is the investment income and the balance sheet investment account balance respectively for AXE company? * A) $137,500, $3,000,000 B) $300,000; $3,162,500 C) $137,500; $2,300,000 D) None of the above.On January 1, 2020, Lovely Company paid P1,200,000 for 40,000 ordinary shares of Lonely Corporation which represent 25% investment in the net assets of Lonely. Lovely has the ability to exercise significant influence over Lonely. Lovely received a dividend of P3 per share from Lonely in 2020. The reported profit of Lonely for the year ended December 31, 2020 was P640,000. The balance of Lovely’s investment in Lonely at December 31, 2020 should be a. 1,480,000 b. 1,360,000 c. 1,240,000 d. 1,200,000
- On January 1, 2020, Alice Company purchased 40,000 shares of Jasper at P100 per share. The investment is measured at fair value through other comprehensive income. Brokerage fees amounted to P120,000. A P5 dividend per share of Jasper had been declared on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. No other transactions occurred in 2020 affecting the investment in Jasper's share. What is the initial measurement of the investment?Z Corporation has the following transactions relating to its investment during 2020: Jan 5 Acquired 16,000 shares of Y company for P1,500,000 paying an additional P10,000 for brokerage and P5,000 for commission. Feb 14 Received dividends from Y company declared January 10,2020 to the stockholders of records January 31,2020, P16,000. Required:prepare all the necessary entries assuming the investment is 1. Financial asset at Fair Value through profit and loss 2. Financial asset at Fair Value through other comprehensive incomeOn January 1, 2020, Windsor Company purchased 6,100 shares of Kusher Company stock for $439,200. Windsor's investment represents 30 percent of the total outstanding shares of Kusher. During 2020, Kusher paid total dividends of $152,000 and reported net income of $456,000. What revenue does Windsor report related to this investment and what is the amount to be reported as an investment in Kusher stock at December 31? Revenue $ Investment in Kusher stock at December 31 $
- During 2021 Carla Vista Company purchased 10700 shares of Kingbird Inc. for $37 per share. During the year Carla Vista Company sold 2850 shares of Kingbird, Inc. for $42 per share. At December 31, 2021 the market price of Kingbird, Inc.’s stock was $35 per share. What is the total amount of gain/(loss) that Carla Vista Company will report in its income statement for the year ended December 31, 2021 related to its investment in Kingbird, Inc. stock? $-7150 $-1450 $-21400 $14250Philip Company purchased 250,000 ordinary shares of Smiley Company for P40 per share on April 2, 2020. Smiley Company had 1,000,000 ordinary shares outstanding during 2020, paid cash dividends of P600,000 during 2020, and reported net income of P2,000,000 for 2020. What amount should Philip Company as report revenue from investment for 2020?During 2021 Blossom Company purchased 8700 shares of Nash Inc. for $17 per share. During the year Blossom Company sold 1850 shares of Nash, Inc. for $22 per share. At December 31, 2021 the market price of Nash, Inc.’s stock was $15 per share. What is the total amount of gain/(loss) that Blossom Company will report in its income statement for the year ended December 31, 2021 related to its investment in Nash, Inc. stock? $-8150 $-17400 $-4450 $9250
- On January 1, 2020, Hannah Company purchased 20% of Montana Company fro P3,000,000. This investment did not give Hannah the ability to exercise significant influence over Montana Company. During 2020, Montana Company reported net income of P3,500,000 and paid cash dividends of P4,000,000. What is the carrying amount of the investment in Montana Company on December 31, 2020?On January 1, 2024, Clor-Proell Enterprises bought 20% of the outstanding common stock of Chen Construction Company for $600 million cash. Chen's net income for the year ended December 31, 2024, was $300 million. During 2024, Chen declared and paid cash dividends of $60 million. Clor-Proell recorded the investment as follows: PURCHASE General Journal Investment in Chen Construction shares Cash NET INCOME ($ in millions) Debit Credit 600 600 Investment in Chen Construction shares (20% x $300 million) 60 Investment revenue 60 DIVIDENDS Cash (20% x $60 million) 12 12 Investment in Chen Construction shares Required: What would be the pretax amounts related to the investment that Clor-Proell would report in its statement of cash flows for the year ended December 31, 2024? Note: Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Cash outflows should be indicated with a minus sign. Operating activities $ 600 Investing activities $ 60 Financing activities $ 12Taballa Ltd owns all the share capital of Amaroo Ltd. The income tax rate is 30%. The following transactions took place during the periods ended 30 June 2023 or 30 June 2024. (a) On 1 May 2023, Amaroo Ltd sold inventories costing $600 to Taballa Ltd for $1 200 on credit. On 30 June 2023, only half of these goods had been sold by Taballa Ltd, and Taballa Ltd had paid $600 to Amaroo Ltd. All remaining inventories were sold to external entities by 30 June 2024 and Taballa Ltd paid the outstanding amount to Amaroo Ltd on 5 May 2024. (b) On 1 January 2023, Taballa Ltd sold an item of plant to Amaroo Ltd for $10 000. Immediately before the sale, Taballa Ltd had the item of plant on its accounts for $ 12 000. Taballa Ltd depreciated items at 5% p. a. on the diminishing balance and Amaroo Ltd used the straight-line method over 10 years. (c) An inventories item with a cost of $4 000 was sold by Taballa Ltd to Amaroo Ltd for $3 600 on 1 January 2024. Amaroo Ltd intended to use this item as…