Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
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Chapter E, Problem E.28BE
To determine
The gain or loss on the sale of the investment for Company M.
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On December 31, 2019, Akron, Inc., purchased 5 percent of Zip Company's common shares on the open market in exchange
for $16,200. On December 31, 2020, Akron, Inc., acquires an additional 25 percent of Zip Company's outstanding common
stock for $96,750.
During the next two years, the following information is available for Zip Company:
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2019
2020
2021
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$69,000
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(12/31)
$324,000
387,000
477,000
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At December 31, 2020, Zip reports a net book value of $289,000. Akron attributed any excess of its 30 percent share of Zip's
fair over book value to its share of Zip's franchise agreements. The franchise agreements had a remaining life of 10 years at
December 31, 2020,
a. Assume Akron applies the equity method to its Investment in Zip account
1. What amount of equity income should Akron report for 2021?
2. On Akron's December 31, 2021, balance sheet, what amount is reported for the Investment in…
In early January 2023, Flounder Inc., a private enterprise that applies ASPE, purchased 40% of the common shares of Washi Corp. for
$361,000. Flounder was now able to exercise considerable influence in decisions made by Washi's management. Washi's statement of
financial position reported the following information at the date of acquisition:
Assets not subject to being amortized
Assets subject to depreciation (10 years average life remaining)
Liabilities
Additional information:
1.
2.
3.
4.
(a)
$180,000
546,000
101,000
Both the carrying amount and fair value are the same for non-depreciable assets and for liabilities.
The fair value of the assets subject to depreciation is $660,000.
The company depreciates its capital assets on a straight-line basis.
Washi reported net income of $143,000 and declared and paid dividends of $99,000 in 2023.
Prepare the journal entry to record Flounder's investment in Washi. Assume that any unexplained payment is goodwill. (Credit
account titles are…
a.Prepare the related journal entries of the debt investment for the year 2018.
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c. Prepare journal entries to record the purchase, the dividend received and the fair value adjustment of investment in Harmoni Bhd.
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Chapter E Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. E - Prob. 1QCCh. E - Rolling Hills Productions held investments in...Ch. E - Prob. 3QCCh. E - Crandall's investment is in less than 2% of...Ch. E - Dumois Corporation purchased 1,500 shares of...Ch. E - Prob. 6QCCh. E - Use the Dumois Corporation data in question 5....Ch. E - Prob. 8QCCh. E - Prob. 9QCCh. E - Prob. 10QC
Ch. E - Prob. E.1SCh. E - (Learning Objective 2: Account for investments in...Ch. E - Prob. E.3SCh. E - Prob. E.4SCh. E - Prob. E.5SCh. E - Prob. E.6SCh. E - Prob. E.7SCh. E - Prob. E.8SCh. E - Prob. E.9SCh. E - Prob. E.10SCh. E - (Learning Objective 5: Record a held-to-maturity...Ch. E - Prob. E.12SCh. E - (Learning Objective 5: Calculate and record...Ch. E - Prob. E.14SCh. E - Prob. E.15SCh. E - Prob. E.16SCh. E - Prob. E.17AECh. E - (Learning Objective 2: Record transactions for...Ch. E - (Learning Objective 2: Analyze and report...Ch. E - Prob. E.20AECh. E - Prob. E.21AECh. E - Prob. E.22AECh. E - Prob. E.23AECh. E - Prob. E.24BECh. E - Prob. E.25BECh. E - (Learning Objective 2: Analyze and report...Ch. E - (Learning Objective 3: Account for transactions...Ch. E - Prob. E.28BECh. E - Prob. E.29BECh. E - Prob. E.30BECh. E - Prob. E.31QCh. E - Prob. E.32QCh. E - Prob. E.33QCh. E - Prob. E.34QCh. E - Prob. E.35QCh. E - Dividends received on an equity-method investment...Ch. E - Prob. E.37QCh. E - Prob. E.38QCh. E - Prob. E.39APCh. E - (Learning Objectives 2, 3: Analyze and report...Ch. E - (Learning Objectives 2, 3: Analyze and report...Ch. E - Prob. E.42APCh. E - Prob. E.43BPCh. E - LO 2, 3 (Learning Objectives 2, 3: Analyze and...Ch. E - Prob. E.45BPCh. E - Prob. E.46BPCh. E - Prob. E.47DC
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