Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Transcribed Image Text:Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2020, for
$186,000 and appropriately accounted for the investment using the fair-value
method. On January 1, 2021, Milani purchased an additional 30 percent of Seida for
$609,000 which resulted in significant influence over Seida. On that date, the fair
value of Seida's common stock was $2,030,000 in total. Seida's January 1, 2021,
book value equaled $1,880,000, although land was undervalued by $135,000. 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 $345,000
and declared and paid dividends of $100,000.
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.)
View transaction list
Journal entry worksheet
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1
2
3
4
LO
5
Record acquisition of Seida stock.
Note: Enter debits before credits.
Transaction
1
General Journal
Debit
Credit
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- Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2020, for $190,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2021, Milani purchased an additional 30 percent of Seida for $600,000 which resulted in significant influence over Seida. On that date, the fair value of Seida’s common stock was $2,000,000 in total. Seida’s January 1, 2021, book value equaled $1,850,000, although land was undervalued by $120,000. 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 $300,000 and declared and paid dividends of $110,000. Prepare the 2021 journal entries for Milani related to its investment in Seida 5. Record collection of dividend from investee.arrow_forwardMilani, Inc., acquired 10 percent of Seida Corporation on January 1, 2020, for $190,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2021, Milani purchased an additional 30 percent of Seida for $600,000 which resulted in significant influence over Seida. On that date, the fair value of Seida’s common stock was $2,000,000 in total. Seida’s January 1, 2021, book value equaled $1,850,000, although land was undervalued by $120,000. 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 $300,000 and declared and paid dividends of $110,000. 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.) 3. Record 2021 amortization for trademark excess fair value.arrow_forwardMilani, Inc., acquired 10 percent of Seida Corporation on January 1, 2020, for $190,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2021, Milani purchased an additional 30 percent of Seida for $600,000 which resulted in significant influence over Seida. On that date, the fair value of Seida’s common stock was $2,000,000 in total. Seida’s January 1, 2021, book value equaled $1,850,000, although land was undervalued by $120,000. 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 $300,000 and declared and paid dividends of $110,000. Prepare the 2021 journal entries for Milani related to its investment in Seida. 2. Record the 40% income earned by Seida.arrow_forward
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