E17.12 (LO 2, 3) (Journal Entries for Fair Value and Equity Methods)pendent situations.The follovWIng ale iut-Situation 1: Conchita Cosmetics acquired 10% of the 200,000 shares of common stock of Martinez Fash-ion at a total cost of $13 per share on March 18, 2020. On June 30, Martinez declared and paid $75,000cash dividends to all stockholders. On December 31, Martinez reported net income of $122,000 for theyear. At December 31, the market price of Martinez Fashion was $15 per share.Situation 2: Monica, Inc. obtained significant influence over Seles Corporation by buying 30% of Seles's30,000 outstanding shares of common stock at a total cost of $9 per share on January 1, 2020. On June 15,Seles declared and paid cash dividends of $36,000 to all stockholders. On December 31, Seles reported anet income of $85,000 for the year.InstructionsPrepare all necessary journal entries in 2020 for both situations.

Journal entry is a primary entry that records the financial transactions initially.

Answered: Situation 1: Conchita Cosmetics…

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 28E

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6. On January 2, 2020, Theodora Company purchased 40,000 shares of Byzantine, Inc. stock at P100 per share. Brokerage fees amounted to P120,000. A P5 dividend per share of Byzantine, Inc. shares had been declared on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. The shares are designated as FVTOCI. On December 31, 2020 the investment has a fair value of P4,200,000. How much should be recognized in the 2020 other comprehensive income related to these securities? Group of answer choices P280,000 P200,000 P400,000 P80,000
The following are two independent situations.Situation 1Blossom Cosmetics acquired 10% of the 215,000 shares of common stock of Martinez Fashion at a total cost of $12 per share on March 18, 2020. On June 30, Martinez declared and paid $74,400 cash dividend to all stockholders. On December 31, Martinez reported net income of $133,600 for the year. At December 31, the market price of Martinez Fashion was $13 per share.Situation 2Blue, Inc. obtained significant influence over Seles Corporation by buying 30% of Seles’s 28,500 outstanding shares of common stock at a total cost of $9 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $35,400 to all stockholders. On December 31, Seles reported a net income of $91,800 for the year.Prepare all necessary journal entries in 2020 for both situations with the date and account title by each debit and credit.
On March 22, 2023, Amelia, Inc., purchased 500 shares of its own common stock in the market for $21 per share. On May 19, 2023, the company sold 300 of these shares in the open market at a price of $24 per share. Required: Use the horizontal model (or write the entry) to show the effects on Amelia, Inc.'s financial statements of: a). The purchase of the treasury stock on March 22, 2023. The sale of the treasury stock on May 19, 2023. b).
SUKON Company acquired equity securities at the beginning of 2020. SUKON Company provided you the following information: Security. No. of shares Acquisition Cost AKO Co. shares 100,000 shares P5,250,000 AKO shares were acquired and were designated as financial asset at fair value through OCI. The shares were acquired at P52.50 per share which included a P2.50 per share transaction cost. Half of the AKO shares were sold at P58 per share on July 1, 2021. Fair value, Fair value, Dec. 31, 2020 Dec. 31, 2021 P55/share P62/share How much is the carrying value of the Investment on December 31, 2021? O 2,900,000 O 2,500,000 O 3,100,000 O 2,750,000
The following are two independent situations.Situation 1Novak Cosmetics acquired 10% of the 215,000 shares of common stock of Martinez Fashion at a total cost of $12 per share on March 18, 2020. On June 30, Martinez declared and paid $74,400 cash dividend to all stockholders. On December 31, Martinez reported net income of $133,600 for the year. At December 31, the market price of Martinez Fashion was $13 per share.Situation 2Splish, Inc. obtained significant influence over Seles Corporation by buying 30% of Seles’s 28,500 outstanding shares of common stock at a total cost of $9 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $35,400 to all stockholders. On December 31, Seles reported a net income of $91,800 for the year.Prepare all necessary journal entries in 2020 for both situations. (
Following is a list of investments owned by Ivanhoe Ltd., as of the company’s year-end, December 31, 2020: Investment No. Shares Cost Fair Value HFX Corporation 1,000 $8.00 $7.10 FDY Ltd. 3,000 6.90 6.95 CTN Corporation 4,600 5.00 5.80 On January 15, 2021, Ivanhoe sold the shares in CTN Corporation for $6.25 per share. Prepare the journal entries required to record the sale, assuming the company uses the fair value through other comprehensive income without recycling method. (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 Jan. 15, 2021 (To adjust to current fair value) (To record the sale of shares) (Reclassification…
b) East Company issued 1,000 shares with P5 par to Howe as compensation for 1,000 hours of legal services performed. Howe bills P160 per hour for his legal 1,000 hours of legal services performed. Howe bills P160 per hour for hiei 1or services. By what amount should the share premium accoùnt increase as a resule òf the transaction? c) Faela Corporation has the following share capital balances as of December 31, 2020: 12% Cumulative and participating Preference Share Capital, P20 par P 2,500,000 value Ordinary Share Capital, P10 par value 1,500,000 The last dividend paid was in the year 2017. On December 28, 2020, the corporation declared P2,000,000 cash dividend to be paid on January 15, 2021 to shareholders of record December 31, 2020. How much dividend should be distributed to ordinary and preference shareholders, respectively? How much is the cash dividend per preference and ordinary share?
Presented below are two independent situations. (1) Grand Cosmetics acquired 10% of the 200,000 ordinary shares of Cey Fashion at a total cost of $12 per share on March 18, 2020. On June 30, Cey declared and paid a $60,000 dividend. On December 31, Cey reported net income of $110,000 for the year. At December 31, the market price of Cey Fashion was $15 per share. The shares are classified as non-trading. (2) Unruh, Inc. obtained significant influence over Olsen Corporation by buying 25% of Olsen's 40,000 outstanding ordinary shares at a total cost of $7 per share on January 1. 2020. On June 15, Olsen declared and paid a cash dividend of $30,000. On December 31. Olsen reported a net income of SS0.000 for the year. Instructions Prepare all the necessary journal entries for 2020 for (a) Grand Cosmetics and (b) Unruh, Inc
The following are two independent situations.Situation 1Metlock Cosmetics acquired 10% of the 187,000 shares of common stock of Martinez Fashion at a total cost of $13 per share on March 18, 2020. On June 30, Martinez declared and paid $68,400 cash dividend to all stockholders. On December 31, Martinez reported net income of $117,600 for the year. At December 31, the market price of Martinez Fashion was $14 per share.Situation 2Bonita, Inc. obtained significant influence over Seles Corporation by buying 40% of Seles’s 27,000 outstanding shares of common stock at a total cost of $9 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $39,200 to all stockholders. On December 31, Seles reported a net income of $84,700 for the year.Prepare all necessary journal entries in 2020 for both situations. (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…
Proble.n 16-15 (PHILCPA Adapted) Heste Company invested in shares of another entity. Number of shares Cost 2018 2019 20,000 40,000 2,000,000 3,500,000 In 2020, the entity received 60,000 rights to purchase one share at P80. Five rights are required to purchase the share. At issue date, rights had a market value of P5 each. The entity used rights to purchase 10,000 additional shares of the investee and allowed the rights not exercised to lapse. What amount was debited to investment account for the purchase of the additional new shares? 1,100,000 b. 1,050,000 a.: 800,000 900,000 C, d.
6. ABC Corp holds 1,000 shares of XYZ Corp.'s shares since 2019. The following are data available at Dec 1, 2020: Cost per share P3.00 Transaction cost per share (upon acquisition) P1 Most recent transaction price per share P2 Transaction cost per share (current) P.50 If ABC classified these shares as investment in stocks-FVOCI, how much is the adjustment for the change in fair value? FVPL 2,000 FVOCI 1,000 FVOCI 1,500 FVOCI 2,000
The following are two independent situations.Situation 1Oriole Cosmetics acquired 10% of the 191,000 shares of common stock of Martinez Fashion at a total cost of $14 per share on March 18, 2020. On June 30, Martinez declared and paid $69,200 cash dividend to all stockholders. On December 31, Martinez reported net income of $116,000 for the year. At December 31, the market price of Martinez Fashion was $15 per share.Situation 2Waterway, Inc. obtained significant influence over Seles Corporation by buying 40% of Seles’s 28,500 outstanding shares of common stock at a total cost of $9 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $38,100 to all stockholders. On December 31, Seles reported a net income of $78,200 for the year.Prepare all necessary journal entries in 2020 for both situations. (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…

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