Inspirational Corporation (IC) purchased 2,000 shares of Dalmation Corporation (DC), representing a 10% ownership interest. The company intended to hold this Investment for a number of years and accounted for the investment using the cost model. IC received a cash dividend of $2 per share from DC. The entry to record the dividend in IC's book includes a
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- Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $146,000. On that date, the fair value of the noncontrolling interest was $36,500, and Slice reported retained earnings of $44,000 and had $92,000 of common stock outstanding. Pizza has used the equity method in accounting for its investment in Slice. Trial balance data for the two companies on December 31, 20X5, are as follows: Pizza Slice Corporation Debit $ Products Company Debit $ 82,000 109,000 82,000 164,000 Item Credit Credit 88,000 277,000 82,000 507,000 176, 200 119,000 20,000 10,000 44,000 Cash & Receivables Inventory Land Buildings & Equipment Investment in Slice Products Company Cost of Goods Sold Depreciation Expense Inventory Losses Dividends Declared 44,000 10,000 6,000 22,000 $ 193,000 Accumulated Depreciation Accounts Payable Notes Payable Common Stock 40,000 266,920 285,000 299,000 207,000 32,280 $ 70,000 15,000 155,000 92,000 82,000 105,000 Retained Earnings Sales Income…DEF purchased 15,000 shares in KMH Co on 1 August 20X6 at a cost of $6.50 each. Transaction costs on the purchase amounted to $1,500. At the year-end 30 September 20X6, these shares are now worth $7.75 each. What is the gain to be recognised and where it will be recorded according to two cases: (1) Shares held for sales (2) Shares held to collect contractual cash flows and sell them. Select the correct gain and the place it will be recorded.Eagle Exporters purchased 80,000 of the 200,000 outstanding shares of Giant Distributors for $3,000,000. Eagle has significant influence over Giant and will account for this investment using the equity method. During the year, Giant declared dividends of $100,000 and reported Net Income of $780,000. What is the balance in the Investment in Giant account at year end? Group of answer choices $2,648,000 $3,272,000 $2,728,000 $3,352,000
- On December 30, Year 3, Varsity Corporation sold its investment in marketable equity securities costing $800,000 for $860,000 cash. The securities were purchased on January 2, Year 1, and the market value of the securities was $820,000 and $780,000 on December 31, Year 1 and Year 2, respectively. How much gain or loss will Varsity report in its income statement for the year ending December 31, Year 3? Multiple Choice A $40,000 gain. An $80,000 gain. A $20,000 loss. A $60,000 gain..Cosmos Corporation had the following long-term investment transactions. Year 1 January 2 Purchased 5,000 shares of Visual, Inc. for $42 per share. October 15 Received Visual, Inc. cash dividend of $2 per share. December 31 Visual reported a net loss of $66,000 for the year. Year 2 February 2 Sold 5% of the shares of Visual Inc for $7000. Prepare the journal entries Cosmos Corporation should record for these transactions and events.Garrett Manufacturing owns 10% of the common stock of Timberline Corporation and used the fair-value method to account for this investment. Timberline reported a net income of $110,000 for 20X2 and paid dividends of $50,000 on October 1, 20X2.How much income should Garrett recognize on this investment in 20X2? Group of answer choices $50,000 $16,500 $25,500 $7,500 $5,000
- Identify how much to add or deduct from the Investment in Associate account of ABC based on the following transactions or events: Net income reported for the year by the associate was P2,500,000. Adjust net income with data from the following: Dividends declared by X is P2,000,000. It has 90,000 6%, P100-par value preference shares outstanding which are cumulative and participating. No dividends were declared in the previous year.6. Assad Corporation repurchases 10,000 of its shares for $12 per share. The shares were originally issued at an average price of $10 per share. How much gain or loss should Assad report on its statement of comprehensive income as a result of this transaction? a.$0 b.$20,000 loss c.$100,000 gain d.$20,000 loss and $100,000 gainDont uplode images in answer Journalize the following: a) Purchased 1200 shares of Spring Corporation common stock at $15 per share plus a brokerage fee of $50. Spring Corporation has 20,000 shares outstanding. b) Purchased an influential interest in Sunshine Co. for $45000 by purchasing 4,800 shares of the 10,000 of the outstanding. c) Received a cash dividend of $.50 per share on the Spring Corporation stock acquired in (a). d) Received a cash dividend of $1.00 per share on the Sunshine Co. stock acquired in (b). e) Sunshine Co. reported net income of 100,000. Recorded the appropriate amount of Sunshine Co. net income using the percentage of stock acquired in (b).
- 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.Blue Spruce Corporation purchased 300 common shares of Burke Inc. for $22,830 and accounted for them using FV-OCI. During the year, Burke paid a cash dividend of $3.45 per share. At year end, Burke shares had a fair value of $72.50 per share. (a) Prepare Blue Spruce's journal entry to record the purchase of the investment. (Credit account titles are automatically indented when the 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. List debit entry before credit entry.) Account Titles and Explanation Debit CreditBean Corporation purchased 35% of the outstanding shares of common stock of Williams Corporation as a long-term investment. Subsequently, Williams Corporation reported net income. What journal entry would Bean Corporation use to record its share of the earnings of Williams Corporation? debit Cash: credit Dividend Revenue debit Investment in Williams Corporation Stock: credit Cash debit Cash: credit Investment in Williams Corporation debit Investment in Williams Corporation; credit Income of Williams Corporation