FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2020, for $183,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2021, Milani purchased an additional 30 percent of Seida for $606,000 which resulted in significant influence over Seida. On that date, the fair value of Seida's common stock was $2,020,000 in total. Seida’s January 1, 2021, book value equaled $1,870,000, although land was undervalued by $136,000. Any additional excess fair value over Seida's book value was attributable to a trademark with an eight-year remaining life. During 2021, Seida reported income of $315,000 and declared and paid dividends of $106,000.
Prepare the 2021 journal entries for Milani related to its investment in Seida. (If no entry is required for a transaction/event, select "No
Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2020, for $183,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2021, Milani purchased an additional 30 percent of Seida for $606,000 which resulted in significant influence over Seida. On that date, the fair value of Seida's common stock was $2,020,000 in total. Seida’s January 1, 2021, book value equaled $1,870,000, although land was undervalued by $136,000. Any additional excess fair value over Seida's book value was attributable to a trademark with an eight-year remaining life. During 2021, Seida reported income of $315,000 and declared and paid dividends of $106,000.
Prepare the 2021 journal entries for Milani related to its investment in Seida. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Record acquisition of Seida stock.
Record the 40% income earned during period by Seida.
Record 2021 amortization for trademark excess fair value.
Record dividend declaration from Seida.
Record collection of dividend from investee.
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