Exercise 15-14 (Algo) Accounting for equity method investments LO P5Listed below are a few events and transactions of Kodax Company.Year 1January 2 Purchased 67,000 shares of Grecco Company common stock for $576,000 cash. Grecco has 201,000 shares of common stockoutstanding, and its activities will be significantly influenced by Kodax.September 1 Grecco declared and paid a cash dividend of $1.00 per share.December 31 Grecco announced that net income for the year is $515,400.Year 2June 1 Grecco declared and paid a cash dividend of $1.50 per share.December 31 Grecco announced that net income for the year is $747,900.December 31 Kodax sold 14,000 shares of Grecco for $180,eee cash.Prepare journal entries to record the above transactions and events of Kodax Company.Note: Do not round intermediate calculations and round your final answers to the nearest dollar amount.View transaction listNo12View journal entry worksheetDateJanuary 2, Year 1 Equity method investmentsCashSeptember 1, Year1CashGeneral JournalwwwDebit576,00067,000Credit576,000

Journal Entry is the primary step in recording the transactions in the books of accounts.The…

Answered: Exercise 15-14 (Algo) Accounting for…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter7: Receivables And Investments

Section: Chapter Questions

Problem 7.5P

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Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2016, were as follows: a. Issued 15,000 shares of 20 par common stock at 30, receiving cash. b. Issued 4, 000 shares of 80 par preferred 5% stock at 100, receiving cash. c. Issued 500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. d. Declared a quarterly dividend of 0.50 per share on common stock and 1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. e. Paid the cash dividends declared in (d). f. Purchased 7,500 shares of Solstice Corp. at 40 per share, plus a 150 brokerage commission. The investment is classified as an available-for-sale investment. g. Purchased 8,000 shares of treasury common stock at 33 per share. h. Purchased 40,000 shares of Pinkberry Co. stock directly from the founders for 24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment. i. Declared a 1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. j. Paid the cash dividends to the preferred stockholders. k. Received 27,500 dividend from Pinkberry Co. investment in (h). l. Purchased 90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of 37 5. The bonds are classified as a held-to-maturity long -term investment. m. Sold, at 38 per share, 2,600 shares of treasury common stock purchased in (g). n. Received a dividend of 0 .60 per share from the Solstice Corp. investment in (f). o. Sold 1,000 shares of Solstice Corp. at 45, including commission. p. Recorded the payment of semiannual interest on the bonds issue d in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method . q. Accrued interest for three months on the Dream Inc. bonds purchased in (I). r. Pinkberry Co. recorded total earnings of 240 ,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. s. The fair value for Solstice Corp. stock was 39. 02 per share on December 31, 2016. The investment is adjusted to fair value , using a valuation allowance account. Assume Valuation Allowance for Available-for-Sale Investments h ad a beginning balance of zero. Instructions 1. Journalize the selected transactions. 2. After all of the transaction s for the year ended December 31, 201 6, had been poste d [including the transactions recorded in part (1) and all adjusting entries), the data that follows were taken from the records of Equinox Products Inc. a. Prepare a multiple-step in come statement for the year ended December 31, 201 6, concluding with earnings per share . In computing earnings per share, assume that the average number of common shares outstanding was 100,000 and preferred dividends were 100,000. ( Round earnings per share to the nearest cent.) b. Prepare a retained earnings statement for the year ended December 31, 20 6. c. Prepare a balance sheet in report form as of December 31, 2016.
Case 1.b In 2022, the following are the equity transactions and the corresponding journal entries made. 1. On April 12, 2022, it was noted that Shipyard, Inc. purchased 4,000 its own common stock at $25 per share Apr 15 Treasury Shares Retained Earnings 2. On Jun 15, the company sold 2,500 shares for $30 per share. Apr 12 Cash Treasury Shares The table shows the equity balances as of December 31, 2022 2022 beginning Balance Common Stock acquisition Sold Treasury Stock Ending Balance Common Stock 1,130,000 1,130,000 Paid-in Common stock dividend distributable 120,000 capital in excess of par 300,000 300,000 Treasury Shares 0 -75,000 50,000 120,000 -25,000 100,000 75,000 Retained Earnings 850,000 75,000 925,000 100,000 75,000 Total 2,400,000 0 50,000 2,450,000 Requirement. (b) Evaluate whether the journal entries dated April 15, 2022 and June 12, 2022 are recorded in accordance with the recognition and measurement principles of treasury shares. (bl) If the journal entries are wrong, what…
ent 10-Ch 12 i aces Equity and Liabilities Share capital-common (131,000 shares issued) Retained earnings (Note 1) Accrued liabilities Notes payable (current) Accounts payable Total equity and liabilities SW Company provides the Equity & Liability information below for analysis. SW Company had net income of $392,900 in 2023 a $308,400 in 2022. Return on equity 2022 % Saved 2023 Note 1: Cash dividends were paid at the rate of $1 per share in 2022 and $2 per share in 2023. Required: 1. Calculate the return on common share equity for 2022 and 2023. (Assume total equity was $1,574,000 at December 31, 2021.) (Round your answers to 1 decimal place.) % 2023 2022 $1,242,000 $1,242,000 370,400 10,300 80,400 56,400 Help 260,400 6,400 67,300 189,500 $1,759,500 $1,765,600
Journalizing equity investment transactions; fair value method Seamus Industries Inc. buys and sells investments as part of its ongoing cash management. The following investment transactions were completed during the year: Feb. 24. Purchased 1,000 shares of Tett Co.'s common stock for $85 per share. May 16. Purchased 2,500 shares of Isaacson Co.'s common stock for $35. July 14. Sold 400 shares of Tett Co. stock for $102 per share. Aug. 12. Sold 750 shares of Isaacson Co. stock for $32 per share. Oct. 31. Received dividends of $0.40 per share on Tett Co. stock. Dec. 31. At the end of the accounting period, the fair value of the remaining 600 shares of Tett Co.'s stock was $110 per share. The fair value of the remaining 1,750 shares of Isaacson Co.'s stock was $30 per share. Journalize the entries for these transactions. If an amount box does not require an entry, leave it blank. Feb. 24 May 16 July 14 Aug. 12 Oct. 31 Dec. 31
A corporation using the equity method of accounting for its investment in a 80%–owned investee, which earned $20,000 and paid $5,000 in dividends What is the ending balance of investment on 31/12 if investment in 1/1 amount 100,000$ ? Select one: a. 112,000 b. 115,000 c. 120,000 d. 100,00
Exercise 6-4 (Cash, Share Capital, and Property Dividends) The PQR Corporation reports the following balances of January 1, 2021: P50,000 Ordinary share capital, P25 par, 2,000 shares outstanding Ordinary share premium Retained earnings 20,000 150,000 The following dividend declarations were made during the year: Mar 15 Declared a cash dividend of P6 per share payable on April 15 to shareholders of record of March 31. July 15 Declared as dividends the stocks of Pentagon Corp. owned by PQR Corp. One share of Pentagon Corp. stock will be distributed for every share of PQR Corp. stock owned. The stocks of Pentagon have a carrying value of P25 per share. Oct 15 Declared a 30% stock dividend distributable on December 1 to shareholders of record of November 15. Stocks are selling on this date at P45 per share. Instructions: Record the declaration and distribution of the above dividends. ♡ Share Favourite Delete Edit More a O O
View Policies Current Attempt in Progress On January 1, Blossom Enterprises had 90,000 no-par ordinary shares issued and outstanding. The shares have a stated value of €5 per share. During the year, the following occurred. Apr. 1 June 15 July 10 Dec. 1 15 Issued 20,000 additional ordinary shares for €15 per share. Declared a cash dividend of €1 per share to shareholders of record on June 30. Paid the €1 cash dividend. Issued 2,000 additional ordinary shares for €18 per share. Declared a cash dividend on outstanding shares of €1.20 per share to shareholders of record on December 31. Prepare the entries to record these transactions. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Problem 4-3: Recording investment and valuing debt & equity investments At the beginning of the year of 2021, the management of Bitlife, Inc concludes that it has sufficient cash to permit some short-term investments in debt and share securities with 10% to 15%. During the year, the following transactions occurred are as followed. Jan 2 Purchased 300 ordinary shares of GothamCo. for $30,000. Feb 7 Purchased 550 ordinary shares of Scarlett, Inc for $38,500. June 4 Purchased at face value $2,500,000 of Goldman Corp 10 years, 8% bonds. Interest is payable semiannually on June 1 and December 1. Aug 16 Received a cash dividend of $2,5 per share on Gotham Co. ordinary shares. Sept 1 Sold 150 ordinary shares of Gotham Co. at $74 Nov 9 Received a cash dividend of $2 per share on Scarlett, Inc ordinary shares. Nov 30 Sold $750,000 the Goldman Corp bonds at 97. Dec 1 Received the semiannual interest on Goldman Corp. bonds. At December 31, the fair value of Gotham. Co ordinary shares was $90 per…
Assessing Financial Statement Effects of Equity Method SecuritiesUse the financial statement effects template to record the following transactions involving investments in marketable securities accounted for using the equity method.a. Purchased 12,000 common shares of Bakersfield Co. at $10 per share; the shares represent 30% ownership in Bakersfield.b. Received a cash dividend of $1.50 per common share from Bakersfield.c. Bakersfield reported annual net income of $75,000.d. Sold all 12,000 common shares of Bakersfield for $128,500.Use negative signs with answers, if appropriate. Balance Sheet Income Statement Noncash Contrib. Earned Transaction Cash Asset + Assets = Liabilities + Captial + Capital Revenues - Expenses = Net income a. Purchased shares of Bakersfield. Answer Answer Answer Answer Answer Answer Answer Answer b. Received cash dividend from Bakersfield. Answer Answer Answer Answer Answer Answer Answer Answer c.…
Entries for Stock Investments, Dividends, and Sale of Stock 1. EX.15-01 Yerbury Corp. manufactures construction equipment. 2. EX.15-02 Journalize the entries to record the following selected equity investment transactions completed by Yerbury during a recent year: 3. EX.15-03 Feb. 2 Purchased for cash 800 shares of Wong Inc. stock for $36 per share plus a $400 brokerage commission. Mar. 16 Received dividends of $0.30 per share on Wong Inc. stock. 4. EX.15-06 June 7 Purchased 600 shares of Wong Inc. stock for $46 per share plus a $300 brokerage commission. 5. EX.15-08.ALGO July 26 Sold 900 shares of Wong Inc. stock for $51 per share less a $450 brokerage commission. Yerbury assumes that the first investments purchased are the first investments sold. 6. EX.15-11.ALGO Sept. 25 Received dividends of $0.40 per share on Wong Inc. stock. 7. EX.15-14.ALGO In your computations, round per share amounts to two decimal places. When required, round final answers to the nearest dollar. For a…
Problem 2 A partial list of the accounts and ending account balances taken from the post-closing trial balance of ALPHA Corporation on December 31, 2019 is shown as follows: Account Amount Accumulated Profits-unappropriated 410,000 Bonds Payable 220,000 Ordinary shares subscribed 50,000 Long term investments in equity securities 210,000 APIC on ordinary shares 460,000 Premium on bonds payable 30,000 Authorized ordinary at P10 par value Preference shares subscribed 900,000 45,000 APIC on preference shares 112,000 Authorized preference shares at P50 par value 400,000 Gain on sale of treasury shares 4,000 Unrealized increase in value of securities available for sale 3,000 Ordinary share warrants outstanding 20,000 Unissued ordinary shares 500,000 Unissued preference shares 100,000 Cash dividends payable-preference 50,000 Donated Capital 25,000 Reserve for bond sinking fund 220,000 Reserve for depreciation 150,000 Revaluation increment in properties 100,000 Subscription…
↑ 3 minutes ago ☆ Live Large Inc. had the following transactions involving non-strategic investments during 2023. 2023 Apr. 1 Paid $100,ese to buy a 90-day term deposit, $100,000 principal amount, 5.0%, dated April 1. There was a $50 transaction fee included in the above-noted payment amount. 12 Purchased 3,000 common shares of Blue Balloon Ltd. at $22.25. There was a $50 transaction fee included in the above-noted payment amount. June 9 Purchased 1,800 common shares of Purple Car Corp. at $49.50. There was a $50 transaction fee included in the above-noted payment amount. 20 Purchased 700 common shares of Yellow Tech Ltd. at $15.75. There was a $50 transaction fee included in the above-noted payment amount. July 1 Purchased for $67,412 a 7.0%, $65,000 Space Explore Inc. bond that matures in eight years when the market interest rate was 6.4%. There was a $50 transaction fee included in the above-noted payment amount. Interest is paid semiannually beginning December 31, 2023. Live Large…

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