ADVANCED FINANCIAL ACCT.(LL) >CUSTOM<
12th Edition
ISBN: 9781260824292
Author: Christensen
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 2, Problem 2.14AE
Income Reporting
Grandview Company purchased 40 percent of the stockof Spinet Corporation on January 1, 20X8, at underlying book value. Spinet recorded the following income for 20X9:
Required
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On January 2, Todd Company acquired 40% of the outstanding stock of McGuire Company for $205,000. For the year ending December 31, McGuire earned income of $48,000 and
paid dividends of $14,000.
Required:
Journalize the entries for Todd Company for the purchase of the stock, share of McGuire Company income, and dividends received from McGuire Company. If an amount box does not
require an entry, leave it blank.
Jan. 2
Dec. 31
Dec. 31
0000
☐☐☐☐☐☐
Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $146,000. On that date, the fair
value of the noncontrolling interest was $36,500, and Slice reported retained earnings of $44,000 and had $92,000 of common stock
outstanding. Pizza has used the equity method in accounting for its investment in Slice.
Trial balance data for the two companies on December 31, 20X5, are as follows:
Pizza
Slice
Corporation
Debit
$
Products Company
Debit
$ 82,000
109,000
82,000
164,000
Item
Credit
Credit
88,000
277,000
82,000
507,000
176, 200
119,000
20,000
10,000
44,000
Cash & Receivables
Inventory
Land
Buildings & Equipment
Investment in Slice Products Company
Cost of Goods Sold
Depreciation Expense
Inventory Losses
Dividends Declared
44,000
10,000
6,000
22,000
$ 193,000
Accumulated Depreciation
Accounts Payable
Notes Payable
Common Stock
40,000
266,920
285,000
299,000
207,000
32,280
$ 70,000
15,000
155,000
92,000
82,000
105,000
Retained Earnings
Sales
Income…
On January 2, Todd Company acquired 40% of the outstanding stock of McGuire Company for $205,000. For the year ending
December 31, McGuire earned income of $48,000 and paid dividends of $14,000.
Required:
Journalize the entries for Todd Company for the purchase of the stock, share of McGuire Company income, and dividends received
from McGuire Company. If an amount box does not require an entry, leave it blank.
Chapter 2 Solutions
ADVANCED FINANCIAL ACCT.(LL) >CUSTOM<
Ch. 2 - What types of investments in common stock normally...Ch. 2 - Prob. 2.2QCh. 2 - Describe an investor’s treatment of an investment...Ch. 2 - How is the receipt of a dividend recorded under...Ch. 2 - How does carrying securities at fair value...Ch. 2 - Prob. 2.6QCh. 2 - Prob. 2.7QCh. 2 - Prob. 2.8QCh. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - How are a subsidiary’s dividend declarations...Ch. 2 - Prob. 2.12QCh. 2 - Give a definition of consolidated retained...Ch. 2 - Prob. 2.14QCh. 2 - Prob. 2.15QCh. 2 - Prob. 2.16AQCh. 2 - When is equity method reporting considered...Ch. 2 - How does the fully adjusted equity method differ...Ch. 2 - What is the modified equity method? When might a...Ch. 2 - Choice of Accounting Method Slanted Building...Ch. 2 - Prob. 2.2CCh. 2 - Prob. 2.3CCh. 2 - Prob. 2.4CCh. 2 - Prob. 2.5CCh. 2 - Prob. 2.6CCh. 2 - Prob. 2.1.1ECh. 2 - Multiple-Choice Questions on Accounting for Equity...Ch. 2 - Prob. 2.1.3ECh. 2 - Prob. 2.1.4ECh. 2 - Multiple-Choice Questions on Intercorporate...Ch. 2 - Prob. 2.2.2ECh. 2 - Prob. 2.3.1ECh. 2 - Prob. 2.3.2ECh. 2 - Prob. 2.3.3ECh. 2 - Prob. 2.4ECh. 2 - Acquisition Price Phillips Company bought 40...Ch. 2 - Prob. 2.6ECh. 2 - Prob. 2.7ECh. 2 - Carrying an investment at Fair Value versus Equity...Ch. 2 - Carrying an Investment at Fair Value versus Equity...Ch. 2 - Prob. 2.10ECh. 2 - Prob. 2.11ECh. 2 - Prob. 2.12ECh. 2 - Prob. 2.13ECh. 2 - Income Reporting Grandview Company purchased 40...Ch. 2 - Investee with Preferred Stock Outstanding Reden...Ch. 2 - Prob. 2.16AECh. 2 - Prob. 2.17AECh. 2 - Changes ¡n the Number of Shares Held Idle...Ch. 2 - Investments Carried at Fair Value and Equity...Ch. 2 - Carried at Fair Value Journal Entries Marlow...Ch. 2 - Consolidated Worksheet at End of the First Year of...Ch. 2 - Consolidated Worksheet at End of the Second Year...Ch. 2 - Prob. 2.23PCh. 2 - Prob. 2.24PCh. 2 - Prob. 2.25APCh. 2 - Equity-Method income Statement Wealthy...Ch. 2 - Prob. 2.27BPCh. 2 - Prob. 2.28BP
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