On December 31, 2019, Akron, Inc., purchased 5 percent of Zip Company's common shares on the open market in exchange for $16,200. On December 31, 2020, Akron, Inc., acquires an additional 25 percent of Zip Company's outstanding common stock for $97,000. During the next two years, the following information is available for Zip Company: Common Stock Fair Value 2019 2020 2021 Income $70,000 82,000 Dividends Declared $7,100 14,200 (12/31) $324,000 388,000 481,000 At December 31, 2020, Zip reports a net book value of $288,000. Akron attributed any excess of its 30 percent share of Zip's fair over book value to its share of Zip's franchise agreements. The franchise agreements had a remaining life of 10 years at December 31, 2020. a. Assume Akron applies the equity method to its Investment in Zip account: 1. What amount equity income should Akron report for 2021? 2. On Akron's December 31, 2021, balance sheet, what amount is reported for the Investment in Zip account? b. Assume Akron uses fair-value accounting for its Investment in Zip account: 1. What amount of income from its investment in Zip should Akron report for 2021? 2. On Akron's December 31, 2021, balance sheet, what amount is reported for the Investment in Zip account?

On December 31, 2019, Akron, Inc., purchased 5 percent of Zip Company's common shares on the open market in exchange for $15,500. On December 31, 2020, Akron, Inc., acquires an additional 25 percent of Zip Company's outstanding common stock for $94,000. During the next two years, the following information is available for Zip Company: Common Stock Fair Value (12/31) $321,000 376,000 478,000 Dividends Income Declared 2019 $79,000 89,000 $6,200 15,800 2020 2021 At December 31, 2020, Zip reports a net book value of $280,000. Akron attributed any excess of its 30 percent share of Zip's fair over book value to its share of Zip's franchise agreements. The franchise agreements had a remaining life of 10 years at December 31, 2020. a. Assume Akron applies the equity method to its Investment in Zip account: 1. What amount of equity income should Akron report for 2021? 2. On Akron's December 31, 2021, balance sheet, what amount is reported for the Investment in Zip account? b. Assume Akron uses…

On December 31, 2019, Akron, Inc., purchased 5 percent of Zip Company's common shares on the open maket in eiciarche for $16,000. On December 31,2020 , Akron, Inc., acquires an additional 25 percent of Zip Companys outstanding commen stociter $95,000. During the next two years, the following information is available for Zip Company. \table[[,Income,\table[[Dividends],[Declared]],\table[[Common Stock],[Fair Value],[(1231)

On December 31, 2019, Akron, Inc., purchased 5 percent of Zip Company's common shares on the open market in exchange for $15,600. On December 31, 2020, Akron, Inc., acquires an additional 25 percent of Zip Company's outstanding common stock for $97,000.   During the next two years, the following information is available for Zip Company:     Income Dividends Declared Common StockFair Value (12/31) 2019     $312,000 2020 $85,000 $7,900 388,000 2021 94,000 16,000 487,000     At December 31, 2020, Zip reports a net book value of $298,000. Akron attributed any excess of its 30 percent share of Zip's fair over book value to its share of Zip's franchise agreements. The franchise agreements had a remaining life of 10 years at December 31, 2020.   Assume Akron applies the equity method to its Investment in Zip account: What amount of equity income should Akron report for 2021? On Akron’s December 31, 2021, balance sheet, what amount is reported for the Investment in Zip account?

On January 1, 2020, Churl Company paid $1,700,000 for a 40% stake in Flip Company. The Flip Company's stockholders equity on January 1 and December 31, 2020 is shown below: Share capital Revaluation surplus Retained earnings January 1 3,000,000 1,000,000 December 31 3,000,000 1,300,000 1,500,000 By Jan 1, 2020, all of Flip's identified assets and liabilities were recognized at fair value. During the current fiscal year, the flip firm recorded a profit before income tax of 1,000,000 and paid dividends to stockholders of 150,000. The revaluation excess is the outcome of Flip Company's land reassessment on December 31, 2020. Flip displays OCI net of any relevant income tax. Furthermore, Flip Company provides depreciation using the declining balance approach, whereas Churl Company employs a straight line. The cumulative depreciation would have been enhanced by 200,000 if Flip Company had used the straight line. The tax rate is set at 35%. On December 31, 2020, Churl Company will report its…

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Juniper Inc. acquired a 25% interest in Saturn Co. on January 1, 2021, for $260,000.  During 2021, Saturn reported net income of $86,000, and paid a total cash dividend to shareholders in the amount of $16,000.  Juniper uses the equity method to account for this investment.  At the end of 2021, Juniper will report the following debit balance in the investment account:   Question 6 options:   $285,500   $260,000   $277,500   $281,500

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During 2021 Blossom Company purchased 8700 shares of Nash Inc. for $17 per share. During the year Blossom Company sold 1850 shares of Nash, Inc. for $22 per share. At December 31, 2021 the market price of Nash, Inc.’s stock was $15 per share. What is the total amount of gain/(loss) that Blossom Company will report in its income statement for the year ended December 31, 2021 related to its investment in Nash, Inc. stock?   $-8150     $-17400     $-4450     $9250

ABC Co. reports under IFRS and has a December 31st year end. On January 1, 2020, ABC Co. purchased 3000 shares (30%) of the outstanding common shares of XYZ Inc. for $28/share in cash.  XYZ Inc. provided the following statement of comprehensive income for the year ended Dec 31, 2020: Net income $22,500 Other comprehensive income 600 Comprehensive income $23,100 XYZ Inc. paid dividends of $1.20 per share during the year.  Due to recent uncertainty in XYZ’s industry, shares were trading at $26.50 per share at year end. ABC CO.'s accountant is still investigating whether it will need to classify the investment as an investment in associate or FVTOCI.  Required:  a. Prepare the 2020 journal entries for ABC Co for the investments assuming the investment is classified as : i) investment in associate (equity method) ii) FVTOCI   b. Calculate the value of the investment in XYZ Inc on the balance sheet of ABC Co. at December 31, 2020 as classified as: i) investment in…