Loose Leaf for Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158762
Author: John J Wild
Publisher: McGraw-Hill Education
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Chapter C, Problem 12E
Summary Introduction
Concept Introduction:
The equity method is one of the methods used for accounting investment in equity securities. This method is applied when the investor exercises significant influence over the investee company. Under the equity method, the investment value is updated with the share in the net income of the investee.
To prepare:the
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Prepare the journal entries for the following transactions for Batson Co.
Sept. 1
Batson Co. purchased 1,200 shares of the total of 100,000 outstanding
shares of Michael Corp. stock for $20.75 per share plus a $70 commission.
Dec. 31
Michael Corp.’s total earnings for the period are $84,000.
31
Michael Corp.’s paid a total of $40,000 in cash dividends to shareholders of record.
Listed below are a few events and transactions of Kodax Company.
Year 1
January 2 Purchased 40,000 shares of Grecco Company common stock for $431,000 cash. Grecco has 120,000 shares of
common stock outstanding, and its activities will be significantly influenced by Kodax.
September 1 Grecco declared and paid a cash dividend of $1.70 per share.
December 31 Grecco announced that net income for the year is $489,900.
Year 2
June 1 Grecco declared and paid a cash dividend of $1.70 per share.
December 31 Grecco announced that net income for the year is $705,400.
December 31 Kodax sold 9,000 shares of Grecco for $160,000 cash.
Prepare journal entries to record the above transactions and events of Kodax Company. (Do not round intermediate calculations and
round your final answers to the nearest dollar amount.)
View transaction list
Journal entry worksheet
< 1
2
Note: Enter debits before credits.
Date
September 1, Year 1
3
Cash
4
Grecco declared and paid a cash dividend of $1.70 per share.
5
6…
Listed below are a few events and transactions of Kodax Company.
Year 1
January 2 Purchased 72,000 shares of Grecco Company common stock for $566,000 cash. Grecco has 216,000 shares of
common stock outstanding, and its activities will be significantly influenced by Kodax.
September 1 Grecco declared and paid a cash dividend of $1.10 per share.
December 31 Grecco announced that net income for the year is $513,900.
Year 2
June 1 Grecco declared and paid a cash dividend of $3.90 per share.
December 31 Grecco announced that net income for the year is $745,400.
December 31 Kodax sold 12,000 shares of Grecco for $125,000 cash.
Prepare journal entries to record the above transactions and events of Kodax Company.
Note: Do not round intermediate calculations and round your final answers to the nearest dollar amount.
View transaction list
Journal entry worksheet
1
2
3
4
5
6
Purchased 72,000 shares of Grecco Company common stock for $566,000
cash. Grecco has 216,000 shares of common stock…
Chapter C Solutions
Loose Leaf for Financial Accounting: Information for Decisions
Ch. C - Under what two conditions should investments be...Ch. C - Prob. 2DQCh. C - Prob. 3DQCh. C - Identify the three classes of debt investments and...Ch. C - Prob. 5DQCh. C - Prob. 6DQCh. C - Prob. 7DQCh. C - Prob. 8DQCh. C - Prob. 9DQCh. C - Prob. 10DQ
Ch. C - Prob. 11DQCh. C - Prob. 12DQCh. C - Prob. 13DQCh. C - Prob. 14DQCh. C - Which of the following statements a through g are...Ch. C - Prob. 2QSCh. C - Prob. 3QSCh. C - Prob. 4QSCh. C - Prob. 5QSCh. C - Prob. 6QSCh. C - Journ Co. purchased short-term investments in...Ch. C - Prob. 8QSCh. C - Prob. 9QSCh. C - Prob. 10QSCh. C - Prob. 11QSCh. C - Prob. 12QSCh. C - Complete the following descriptions by filling in...Ch. C - Complete the following descriptions by filling in...Ch. C - Prob. 15QSCh. C - Prob. 17QSCh. C - Complete the following descriptions by filling in...Ch. C - Prob. 2ECh. C - Prob. 4ECh. C - Prob. 5ECh. C - Prob. 6ECh. C - Prob. 7ECh. C - Use the following information of Prescrip Co. to...Ch. C - Prob. 9ECh. C - Prob. 10ECh. C - Prob. 12ECh. C - Complete the following descriptions by filling in...Ch. C - Prob. 14ECh. C - Prob. 1PSACh. C - Prob. 3PSACh. C - Prob. 4PSACh. C - Prob. 5PSACh. C - Prob. 6PSACh. C - Prob. 1PSBCh. C - Prob. 3PSBCh. C - Prob. 4PSBCh. C - Prob. 5PSBCh. C - Prob. 6PSBCh. C - Prob. CSPCh. C - Prob. 1GLPCh. C - Prob. 2GLPCh. C - Prob. 1FSACh. C - Prob. 2FSACh. C - Prob. 3FSACh. C - Prob. 2BTN
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