Pronghorn Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,243,200 for 51,800 shares. Kulikowski Inc. declared and paid an $0.75 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $786,000 for 2021. The fair value of Kulikowski's stock was $27 per share at December 31, 2021.

Pronghorn Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,243,200 for 51,800 shares. Kulikowski Inc. declared and paid an $0.75 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $786,000 for 2021. The fair value of Kulikowski's stock was $27 per share at December 31, 2021.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 25E

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Bramble Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $ 1,294,800 for 49,800 shares. Kulikowski Inc. declared and paid an $ 0.75 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $ 764,000 for 2021. The fair value of Kulikowski’s stock was $ 29 per share at December 31, 2021.
Bramble Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $ 1,294,800 for 49,800 shares. Kulikowski Inc. declared and paid an $ 0.75 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $ 764,000 for 2021. The fair value of Kulikowski’s stock was $ 29 per share at December 31, 2021. (a) Prepare the journal entries for Bramble Inc. for 2020 and 2021, assuming that Bramble cannot exercise significant influence over Kulikowski. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit (To record dividend.) (To record…
Bramble Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,294,800 for 49,800 shares. Kulikowski Inc. declared and paid an $0.75 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $764,000 for 2021. The fair value of Kulikowski’s stock was $29 per share at December 31, 2021. PLEASE HELP WITH LIST OF ACCOUNTS Accumulated Other Comprehensive Loss Allowance for Doubtful Accounts Allowance to Reduce Inventory to Market Bad Debt Expense Bonds Payable Cash Call Option Common Stock Cost of Goods Sold Debt Investments Dividend Revenue Dividend Receivable Equity Investments Fair Value Adjustment Futures Contract Gain on Sale of Investments Gain on Settlement of Call Option Gain on Settlement of Put Option Interest Expense Interest Receivable Interest Revenue Inventory Investment Income Loss on Impairment Loss on Sale of Investments Loss on Settlement of Call Option Loss on…
Bramble Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $ 1,294,800 for 49,800 shares. Kulikowski Inc. declared and paid an $ 0.75 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $ 764,000 for 2021. The fair value of Kulikowski’s stock was $ 29 per share at December 31, 2021. At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31, 2021? What is the total net income reported in 2021 under each of these methods? Fair Value Method Equity Method Investment amount (balance sheet) $ $ Dividend revenue (income statement) Unrealized holding gain (income statement) Investment income (income statement)
Sarasota Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,097,800 for 49,900 shares. Kulikowski Inc. declared and paid an $0.85 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $769,000 for 2021. The fair value of Kulikowski’s stock was $25 per share at December 31, 2021. Assume that the security is a trading security. Prepare the journal entries for Sarasota Inc. for 2020 and 2021, assuming that Sarasota cannot exercise significant influence over Kulikowski. Date Account Titles and Explanation Debit Credit Dec. 31, 2020 June 30, 2021 Dec. 31, 2021 (To record dividend.) (To record fair value.) At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31, 2021? What is the…
Novak Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,214,400 for 52,800 shares. Kulikowski Inc. declared and paid an $0.80 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $768,000 for 2021. The fair value of Kulikowski’s stock was $26 per share at December 31, 2021. Assume that the security is a trading security. Prepare the journal entries for Novak Inc. for 2020 and 2021, assuming that Novak cannot exercise significant influence over Kulikowski. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020June 30, 2021Dec. 31, 2021…
Novak Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,214,400 for 52,800 shares. Kulikowski Inc. declared and paid an $0.80 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $768,000 for 2021. The fair value of Kulikowski’s stock was $26 per share at December 31, 2021. Assume that the security is a trading security. At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31, 2021? What is the total net income reported in 2021 under each of these methods? Fair Value Method Equity Method Investment amount (balance sheet) $ $ Dividend revenue (income statement) Unrealized holding gain (income statement) Investment income (income statement)
Novak Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,214,400 for 52,800 shares. Kulikowski Inc. declared and paid an $0.80 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $768,000 for 2021. The fair value of Kulikowski’s stock was $26 per share at December 31, 2021. Assume that the security is a trading security. Prepare the journal entries for Novak Inc. for 2020 and 2021, assuming that Novak can exercise significant influence over Kulikowski. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020June 30, 2021Dec. 31, 2021…
Pharoah Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,177,500 for 47,100 shares. Kulikowski Inc. declared and paid an $0.80 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $659,000 for 2021. The fair value of Kulikowski’s stock was $28 per share at December 31, 2021. Prepare the journal entries for Pharoah Inc. for 2020 and 2021, assuming that Pharoah cannot exercise significant influence over Kulikowski.
Pharoah Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,177,500 for 47,100 shares. Kulikowski Inc. declared and paid an $0.80 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $659,000 for 2021. The fair value of Kulikowski’s stock was $28 per share at December 31, 2021. Prepare the journal entries for Pharoah Inc. for 2020 and 2021, assuming that Pharoah cannot exercise significant influence over Kulikowski. At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31, 2021? What is the total net income reported in 2021 under each of these methods? Fair Value Method Equity Method Investment amount (balance sheet) $ $ Dividend revenue (income statement) Unrealized holding gain (income statement) Investment income (income statement)
Shamrock Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $ 1,245,600 for 51,900 shares. Kulikowski Inc. declared and paid an $ 0.85 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $ 699,000 for 2021. The fair value of Kulikowski’s stock was $ 27 per share at December 31, 2021.
Waterway Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,170,000 for 46,800 shares. Kulikowski Inc. declared and paid an $0.90 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $802,000 for 2021. The fair value of Kulikowski's stock was $28 per share at December 31, 2021. (a) Prepare the journal entries for Waterway Inc. for 2020 and 2021, assuming that Waterway cannot exercise significant influence over Kulikowski. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)