Prepare dated journal entries for the investment on acquiring the company's books from acquisition to disposal.
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On May 1, 2020, Bear Inc. acquired 1,250 shares of cub Ltd. for $60,000. This investment represents a 14% interest in Cub Ltd. Bear Inc. has classified this investment as FVTLP. On December 31, 2020, Cub Ltd. paid a $50,000 dividend to its shareholders. At June 30, 2021, Cub Ltd.'s shares were valued at $40 per share and Cub Ltd. reported a net loss of $20,000 for the year. On September 15, 2021, Bear Inc. sold the shares for $90,000. Both Bear Inc. and Cub Ltd. have June 30, 2021 year-ends.
Prepare dated journal entries for the investment on acquiring the company's books from acquisition to disposal. Ignore income taxes.
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- On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a 30% corporate income tax rate. During 2019, Kittson earned net income of 67,000, and the following events occurred: 1. Cash dividends of 3 per share on 4,000 shares of common stock were declared and paid. 2. A small stock dividend was declared and issued. The dividend consisted of 600 shares of 10 par common stock. On the date of declaration, the market price of the companys common stock was 36 per share. 3. The company recalled and retired 500 shares of 100 par preferred stock. The call price was 125 per share; the stock had originally been issued for 110 per share. 4. The company discovered that it had erroneously recorded depreciation expense of 45,000 in 2018 for both financial reporting and income tax reporting. The correct depreciation for 2018 should have been 20,000. This is considered a material error. Required: 1. Prepare journal entries to record Items 1 through 4. 2. Prepare Kittsons statement of retained earnings for the year ended December 31, 2019.During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows: The net holding gain or loss included in Anthonys income statement for the year should be: a. 0 b. 3,000 gain c. 9,000 loss d. 12,000 lossTama Companys capital structure consists of common stock and convertible bonds. At the beginning of 2019, Tama had 15,000 shares of common stock outstanding; an additional 4,500 shares were issued on May 4. The 7% convertible bonds have a face value of 80,000 and were issued in 2016 at par. Each 1,000 bond is convertible into 25 shares of common stock; to date, none of the bonds have been converted. During 2019, the company earned net income of 79,200 and was subject to an income tax rate of 30%. Required: Compute the 2019 diluted earnings per share.
- Hyde Corporations capital structure at December 31, 2018, was as follows: On July 2, 2019, Hyde issued a 10% stock dividend on its common stock and paid a cash dividend of 2.00 per share on its preferred stock. Net income for the year ended December 31, 2019, was 780,000. What should be Hydes 2019 basic earnings per share? a. 7.80 b. 7.09 c. 7.68 d. 6.73On May 1, 2020, Clarke Inc. acquired 1,250 shares of Mayson Ltd. for $75,000. This investment represents a 16% interest in Mayson Ltd. Clarke Inc. has classified this investment as FVTOCI. On December 31, 2020, Mayson Ltd paid a $35,000 dividend to its shareholders. On April 30, 2021, Mayson Ltd's shares were valued at $30 per share, and Mayson Ltd. reported a net loss of $27,000 for the year. On June 15, 2021, Clarke Inc sold the shares for $37,000. Both Clarke Inc and Mayson Ltd have April 30, 2021, year-ends. Required: Prepare dated journal entries for the investment on the acquiring company's books from acquisition to disposal. Ignore income taxes. Journal entry descriptions are optional.On May 1, 2020, Clarke Inc. acquired 1,250 shares of Mayson Ltd. for $75,000. This investment represents a 16% interest in Mayson Ltd. and Clark Inc. has significant influence. On December 31, 2020, Mayon Ltd. paid a $35,000 dividend to its shareholders. At April 30, 2021 Mayson Ltd.'s shares were valued at $30 per share and Mayson Ltd. reported net income of $27,000 for the year. On June 15, 2021, Clarke Inc. sold the shares for $37,000. Both Clarke Inc. and Mayson Ltd. have April 30, 2021 year-ends. Prepare dated journal entries for the investment on the acquiring company's books and from acquisition to disposal. Ignore income taxes. Journal entry descriptions are optional.
- On April 2, 2020, enson Ltd. acquired 2,500 shares of Lam Corp. for $5o,000: ihts investmentrepresents a 18% interest in Lam Corp. Jenson Ltd. has classified this investment as FVTLP. OnOctober 31, 2020, Lam Corp. paid a $42,000 dividend to its shareholders. At March 31, 2021, LamCorp.'s shares were valued at $15 per share and Lam Corp. reported net income of $145,000 forthe year. On May 15, 2021, Jenson Ltd. sold the shares for $25,000. Both Jenson Ltd. and LamCorp. have March 31, 2021 year-ends.Required:Prepare dated journal entries for the investment on the acquiring company's books fromacquisition to disposal. Ignore income taxes. Journal entry descriptions are optional: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?On January 2, 2021, Normal Inc. acquired 15% interest in Laco Co. by paying 1,500, 000 for 7,500 ordinary shares. On this date, the net assets of Laco Co. totaled P9 million. The investment was classified as a financial asset at fair value through other comprehensive income. The fair values Laco Co.'s identifiable assets and liabilities approximate their book values. On August 1, 2021, Normal received dividends of P4 per share from Laco Co. Fair value of the stocks on December 31, 2021 was P190. Net income reported by Laco for the year ended amounted to P1,500,000. On July 1, 2022, Normal Inc. paid P1 million to purchase 5,000 additional shares of Laco Co. from another shareholder. On this date the fair value of the net assets exceeds carrying value by 500, 000 attributable to depreciable asset with estimated remaining life of 5 years. On February 1, 2022, cash dividends of P5 were received while dividends of P6 were received on August 1, 2022. Net income reported for the year ended…
- On January 2, 2021, Howdy Doody Corporation purchased 15% of Ranger Corporation's common stock for $80,000. During 2021, Ranger had net income of $120,000 and declared and paid a dividend of $40,000. On December 31, 2021, the fair value of the Ranger stock owned by Howdy Doody had increased to $90,000. How much should Howdy Doody show in the 2021 income statement as income from this investment? Answer: $On 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 $On January 1, 2021, Ildiko Corporation purchased a 35% interest in the common shares of Rance Ltd. for $60,000. Rance Ltd. reported profit and paid dividends as follows: 2020-profit $40,000; dividends paid $50,000 2021 - profit $88,000; dividends paid $70,000. Assume that Ildiko Corporation uses the equity method to account for its investment in Rance Ltd. The balance in the "Investment Income" account on Ildiko's Income Statement for the year ended December 31, 2021 is $62,800 O $61,750 O $5,250 $43,750
