Willard Co. acquired a 30% interest in Diltronics for $420,000 and appropriately applied the equity method. During the first year, Diltronics reported net income of $250,000 and paid cash dividends totaling $50,000. What amount will Willard report as it relates to the investment at the end of the first year on its income statement? Show the calculation used to get the answer Investment earnings totaling $75,000 Investment earnings totaling $45,000 Net investment earnings totaling $150,000 Receipt of dividends totaling $15,000

Willard Co. acquired a 30% interest in Diltronics for $420,000 and appropriately applied the equity method. During the first year, Diltronics reported net income of $250,000 and paid cash dividends totaling $50,000. What amount will Willard report as it relates to the investment at the end of the first year on its income statement? Show the calculation used to get the answer Investment earnings totaling $75,000 Investment earnings totaling $45,000 Net investment earnings totaling $150,000 Receipt of dividends totaling $15,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 63P: Mike Sanders is considering the purchase of Kepler Company, a firm specializing in the manufacture...

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Mike Sanders is considering the purchase of Kepler Company, a firm specializing in the manufacture of office supplies. To be able to assess the financial capabilities of the company, Mike has been given the companys financial statements for the 2 most recent years. Required: Note: Round all answers to two decimal places. 1. Compute the following for each year: (a) return on assets, (b) return on stockholders equity, (c) earnings per share, (d) price-earnings ratio, (e) dividend yield, and (f ) dividend payout ratio. 2. CONCEPTUAL CONNECTION Based on the analysis in Requirement 1, would you invest in the common stock of Kepler?
Scott Co. acquired a 30% interest in Roker, Inc. for $210,000 and appropriately applied the equity method. During the first year, Roker, Inc. reported net income of $125,000 and paid cash dividends totaling $25,000.What amount will Scott report as it relates to the investment at the end of the first year on its income statement? Select one: A. Investment earnings totaling $37,500 B. Investment earnings totaling $22,500 C. Receipt of dividends totaling $7,500 D. Net investment earnings totaling $75,000
As of the beginning of the year, Devers, Inc. acquired common stock of Verdugo Limited at book value. During the current year, Verdugo earned $12.5 million and declared dividends of $4 million. Indicate the amount shown for Investment in Verdugo on Devers Inc.’s balance sheet on December 31 and the amount of total income Devers would report on the income statement for the year related to its investment under the assumption that Devers did the following: A. Paid $2 million for a 10-percent interest in Verdugo and classifies the investment as a passive investment. The fair value of the investment at December 31st was now $2.3 million. B. Paid $7 million for a 35-percent interest in Verdugo and uses the equity method. The fair value of the investment at December 31st was now $7.3 million. Please dont provide handwritten or image based answers thank you
On January 1, 2020, Windsor Company purchased 6,100 shares of Kusher Company stock for $439,200. Windsor's investment represents 30 percent of the total outstanding shares of Kusher. During 2020, Kusher paid total dividends of $152,000 and reported net income of $456,000. What revenue does Windsor report related to this investment and what is the amount to be reported as an investment in Kusher stock at December 31? Revenue $ Investment in Kusher stock at December 31 $
Parent Co. invested $1,000,000 in Sub Co. for 25% of its outstanding stock. Sub Co. pays out 40% of net income in dividends each year. Instructions Use the information in the following T-account for the investment in Sub to answer the following questions. Investment in Sub Co. 1,000,000 110,000 44,000 a. How much was Parent Co.'s share of Sub Co.'s net income for the year? b. What was Sub Co.'s total net income for the year? c. What was Sub Co.'s total dividends for the year? d. How much was Parent Co.'s share of Sub Co.'s dividends for the year?
Bonita Co. invested $910,000 in Windsor Co. for 25% of its outstanding stock. Windsor Co. pays out 30% of net income in dividends each year.Use the information in the following T-account for the investment in Windsor to answer the following questions. Investment in Windsor Co. 910,000 99,000 29,700 (a) How much was Bonita Co.’s share of Windsor Co.’s net income for the year? Net income $enter Bonita’s net income in dollars (b) What was Windsor Co.’s total net income for the year? Total net income $enter the total net income of WindsorCo. for the year (c) What was Windsor Co.’s total dividends for the year? Total Dividends $enter the total dividends of WindsorCo. for the year (d) How much was Bonita Co.’s share of Windsor Co.’s dividends for the year? Dividends $enter the dollar amount of dividends for Bonita Co.
Champaign Corporation purchases 45% of the common stock of Rockville, Inc. at a purchase price of $17.3 million cash. During the year, Rockville reports net income of $2,368,000 and pays $435, 200 of cash dividends. At the end of the year, the market value of Champaign's investment is $19.0 million. What is the year-end balance of the equity investment in Rockville? Select one: a. $20, 103, 200 b. $18, 169, 760 c. None of these are correct d. $17,300,000 e. $ 20,932,800
A. Gympa reported on its income statement a net income $647,000 for the year ended December 31 before considering the following: During the year, Gympa purchased trading securities At year-end , the fair value of the investment portfolio was $50,000 lesshan the cost The balance of Retained Earnings was $792,000 on January 1 Gympa paid $67,000 in cash dividends during the year. Using the above data, calculate the balance of Retained Earnings on Decemeber 31. A. The Nile House of Fashion has Asset Turnover of 2.65X. What does it mean? That each dollar of Nile’s asset generates $2.25 in sales That each dollar of stockholders’ equity generates $2.25 of profit That Nile’s EPS is $2.25 That each dollar of Nile’s Equity generates a deficit of $2.25 None of the above.
Fill in the dollar changes caused in the Investment account and Dividend Revenue or Investment Revenue account by each of the following transactions, assuming Nash's Company uses (a) the fair value method and (b) the equity method for accounting for its investments in Swifty Company. 1. At the beginning of Year 1, Nash's bought 30% of Swifty's common stock at its book value. Total book value of all Swifty's common stock was $720,000 on this date. 2. (a) During Year 1, Swifty reported $50,000 of net income. (b) During Year 1, Swifty paid $28,000 of dividends. 3. (a) During Year 2, Swifty reported $25,000 of net income. (b) During Year 2, Swifty paid $18,000 of dividends. 4. (a) During Year 3, Swifty reported a net loss of $8,000. (b) During Year 3, Swifty paid $3,500 of dividends. 5. Indicate the Year 3 ending balance in the Investment account, and cumulative totals for Years 1, 2, and 3 for dividend revenue and investment revenue.
The income statement for Dodson Corporation reported net income of $22,400 for the year ended December 31 before considering the following: During the year the company purchased available-for-sale securities. At year end, the fair value of the investment portfolio was $2,100 more than cost. The balance of Retained Earnings was $83,000 on January 1. . Dodson Corporation paid $9,000 in cash dividends during the year. Calculate the balance of Retained Earnings on December 31. 51,600
Kramer Corporation had the following long-term Investment transactions. Prepare the journal entries Kramer Corporation should record for these transactions and events. Jan 2 Purchased 5,000 shares of Optic, Inc. for $42 per share plus $7,000 in fees and commission. These shares represent a 35% ownership of Optic. Oct 15 Received Optic, Inc. cash dividend of $2 per share. Dec 31 Optic reported a net income of $66,000 for the year.
Madison Corporation purchases an investment in Lake Geneva, Inc. at a purchase price of $20 million cash, representing 40% of the book value of Lake Geneva, Inc. During the year, Lake Geneva reports net income of $3,400,000 and pays $838,000 of cash dividends. At the end of the year, the market value of Madison’s investment is $24 million. What is the year-end balance of the equity investment in Lake Geneva? Select one: a. $21,024,800 b. $24,000,000 c. $20,000,000 d. $22,562,000 e. $21,360,000