Advanced Accounting
14th Edition
ISBN: 9781260726435
Author: Joe Ben Hoyle
Publisher: Mcgraw-hill Higher Education (us)
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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
$
An investor company purchased 17,000 of the 50,000 outstanding shares of the investee company's common stock for $338,000 on January 1, 2021. During 2021, the investee company declared dividends of $33,000 and reported earnings for the year of $158,000. If the investor company uses the equity method of accounting for its investment in the investee company, it should report Dividend Revenue from the investee for 2021 in the amount of $_______. (If there is no Dividend Revenue, then enter 0. Do not round your answer for any part of the computation.)
rroDiems 19 through 21 should be viewed as independent situations. They are based on the following data:
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has
the following trial balance:
Page 136
Debit
Credit
Accounts payable
$ 50,000
Accounts receivable
$ 40,000
Additional paid-in capital
Buildings (net) (4-year remaining life)
50,000
120,000
Cash and short-term investments
60,000
Common stock
250,000
Equipment (net) (5-year remaining life)
Inventory
200,000
90,000
Land
80,000
Long-term liabilities (mature 12/31/23)
150,000
Retained earnings, 1/1/20
100,000
Supplies
10,000
$600,000
$600,000
Totals
During 2020, Abernethy reported net income of $80,000 while declaring and paying dividends of $ 10,000. During 2021, Abernethy
reported net income of $110,000 while declaring and paying dividends of $30,000.
LO 3-3a
1. Assume that Chapman Company acquired Abernethy's common stock for $490,000 in cash. As of January 1, 2020,…
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