Equity investments: 20%-50% ownershipOn January 2, 20Y4, Whitworth Company acquired 28% of the outstanding stock of Aloof Company for $350,000. For the year ended December 31, 20Y4,Aloof Company earned income of $91,000 and paid dividends of $28,000. On January 31 20Y5, Whitworth Company sold all of its investment in AloofCompany stock for $365,640.Journalize the ehtries for Whitworth Company for the purchase of the stock, the share of Aloof income, the dividends received from Aloof Company, and thesale of the Aloof Company stock. If an amount box does not require an entry, leave it blank.Jan. 2, 20Y4 - PurchaseDec. 31, 20Y4 IncomeDec. 31, 20Y4 - DividendsJan. 31, 20Y5 - Sale

Journal Entry: Business transactions are recorded in an accounting system for an organization…

Answered: On January 2, 20Y4, Whitworth Company…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter14: Intercorporate Investments In Common Stock

Section: Chapter Questions

Problem 16E

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Ames Corporation repurchases 10,000 shares of its common stock for $12 per share. The shares were originally issued at an average price of $10 per share. Later it resells 6,000 of the shares for $15 per share and the remaining 4,000 shares for $17 per share. How much gain or loss should Ames report on its income statement as a result of these transactions? $38.000 gain $0 $20,000 loss $20,000 loss and $38,000 gain
Equity investments: 20%-50% ownership On January 2, 20Y4, Whitworth Company acquired 30% of the outstanding stock of Aloof Company for $310,000. For the year ended December 31, 20Y4, Aloof Company earned income of $81,000 and paid dividends of $25,000. On January 31 20Y5, Whitworth Company sold all of its investment in Aloof Company stock for $324,300. Journalize the entries for Whitworth Company for the purchase of the stock, the share of Aloof income, the dividends received from Aloof Company, and the sale of the Aloof Company stock. If an amount box does not require an entry, leave it blank. Jan. 2, 20Y4 - Purchase Dec. 31, 20Y4 - Income Dec. 31, 20Y4 - Dividends Jan. 31, 20Y5 - Sale
Equity investments: 20%–50% ownership On January 2, 20Y4, Whitworth Company acquired 35% of the outstanding stock of Aloof Company for $290,000. For the year ended December 31, 20Y4, Aloof Company earned income of $75,000 and paid dividends of $23,000. On January 31 20Y5, Whitworth Company sold all of its investment in Aloof Company stock for $306,200. Journalize the entries for Whitworth Company for the purchase of the stock, the share of Aloof income, the dividends received from Aloof Company, and the sale of the Aloof Company stock. If an amount box does not require an entry, leave it blank. Jan. 2, 20Y4 - Purchase Investment in Aloof Company Stock Investment in Aloof Company Stock Cash Cash Dec. 31, 20Y4 - Income Investment in Aloof Company Stock Investment in Aloof Company Stock Income of Aloof Company Income of Aloof Company Dec. 31, 20Y4 - Dividends Cash Cash Investment in Aloof Company Stock Investment in Aloof Company Stock…
Entries for equity investments: 20%-50% ownership On January 4, 20Y4, Ferguson Company purchased 122,500 shares of Silva Company's common stock directly from one of the founders for a price of $37 per share. Silva has 350,000 shares outstanding, including the Daniels shares. On July 2, 20Y4, Silva paid $355,000 in total dividends to its shareholders. On December 31, 20Y4, Silva reported a net income of $1,125,000 for the year. a. Journalize the Ferguson Company entries for the transactions involving its investment in Silva Company during 20Y4. If an amount box does not require an entry, leave it blank. 20Y4, Jan. 4 20Y4, July 2 20Y4, Dec. 31 b. Determine the December 31, 20Y4, balance of Investment in Silva Company Stock. $
Journalizing equity investment transactions; 20%-50% ownership On January 2, 20Y4, Whitworth Company acquired 40% of the outstanding stock of Aloof Company for $320,000. For the year ended December 31, 20Y4, Aloof Company earned income of $180,000 and paid dividends of $12,000. On January 31, 20Y5, Whitworth Company sold all of its investment in Aloof Company stock for $385,200. Journalize the entries for Whitworth Company for the purchase of the stock, the share of Aloof income, the dividends received from Aloof Company, and the sale of the Aloof Company stock. If an amount box does not require an entry, leave it blank. 20Y4 Jan. 2 20Y4 Dec. 31 20Y4 Dec. 31 20Y5 Jan. 31
Entries for equity investments: 20%-50% ownership At a total cost of $761,600, Herrera Corporation acquired 56,000 shares of Tran Corp. common stock as a long-term investment. Tran Corp. has 200,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation. a. Journalize the entries by Herrera Corporation to record the following information: If an amount box does not require an entry, leave it blank. 1. Tran Corp. reports net income of $1,370,000 for the current period. 2. A cash dividend of $1.30 per common share is paid by Tran Corp. during the current period. 88 b. Why is the equity method appropriate for the Tran Corp. investment? An investment amount of the outstanding common stock of the investee is presumed to represent significant influence. The equity method is appropriate when the investor exercise significant influence over the investee.
Entries for equity investments: 20%-50% ownership At a total cost of $1,104,000, Herrera Corporation acquired 96,000 shares of Tran Corp. common stock as a long-term investment. Tran Corp. has 300,000 shares of common stock outstanding, Induding the shares acquired by Herrera Corporation. a. Journalize the entries by Herrera Corporation to record the following information: If an amount box does not require an entry, leave it blank. 1. Tran Corp. reports net income of $1,990,000 for the current period. 88 2. A cash dividend of $1.10 per common share is paid by Tran Corp. during the current period. b. Why is the equity method appropriate for the Tran Corp. investment? An investment amount of the outstanding common stock of the investee is presumed to represent significant influence. The equity method is appropriate when the investor exercise significant influence over the investee.
Entries for equity investments: 20%-50% ownership At a total cost of $2,520,000, Herrera Corporation acquired 144,000 shares of Tran Corp. common stock as a long-term investment. Tran Corp. has 400,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation. a. Journalize the entries by Herrera Corporation to record the following information: If an amount box does not require an entry, leave it blank. 1. Tran Corp. reports net income of $4,540,000 for the current period. 2. A cash dividend of $1.70 per common share is paid by Tran Corp. during the current period. b. Why is the equity method appropriate for the Tran Corp. investment? An investment amount over the investee. of the outstanding common stock of the investee is presumed to represent significant influence. The equity method is appropriate when the investor exercise significant influence
Entries for equity investments: 20%–50% ownership On January 4, 20Y4, Ferguson Company purchased 480,000 shares of Silva Company’s common stock directly from one of the founders for a price of $30 per share. Silva has 1,200,000 shares outstanding, including the Daniels shares. On July 2, 20Y4, Silva paid $750,000 in total dividends to its shareholders. On December 31, 20Y4, Silva reported a net income of $2,000,000 for the year. a. Journalize the Ferguson Company entries for the transactions involving its investment in Silva Company during 20Y4. If an amount box does not require an entry, leave it blank. 20Y4, Jan. 4 Investment in Silva Company Stock fill in the blank 1fca1107203ffe1_2 fill in the blank 1fca1107203ffe1_3 Cash fill in the blank 1fca1107203ffe1_5 fill in the blank 1fca1107203ffe1_6 20Y4, July 2 Cash fill in the blank 1fca1107203ffe1_8 fill in the blank 1fca1107203ffe1_9 Investment in Silva Company Stock fill in the blank 1fca1107203ffe1_11 fill…
Entries for equity investments: 20%–50% ownership On January 4, 20Y4, Ferguson Company purchased 480,000 shares of Silva Company’s common stock directly from one of the founders for a price of $30 per share. Silva has 1,200,000 shares outstanding, including the Daniels shares. On July 2, 20Y4, Silva paid $750,000 in total dividends to its shareholders. On December 31, 20Y4, Silva reported a net income of $2,000,000 for the year. a. Journalize the Ferguson Company entries for the transactions involving its investment in Silva Company during 20Y4. If an amount box does not require an entry, leave it blank. b. Determine the December 31, 20Y4, balance of the investment in Silva Company stock account.
Entries for equity investments: 20%–50% ownership On January 4, 20Y4, Ferguson Company purchased 480,000 shares of Silva Company’s common stock directly from one of the founders for a price of $30 per share. Silva has 1,200,000 shares outstanding, including the Daniels shares. On July 2, 20Y4, Silva paid $750,000 in total dividends to its shareholders. On December 31, 20Y4, Silva reported a net income of $2,000,000 for the year. Question Content Area a. Journalize the Ferguson Company entries for the transactions involving its investment in Silva Company during 20Y4. If an amount box does not require an entry, leave it blank. 20Y4, Jan. 4 - Select - - Select - - Select - - Select - 20Y4, July 2 - Select - - Select - - Select - - Select - 20Y4, Dec. 31 - Select - - Select - - Select - - Select - Question Content Area b. Determine the December 31, 20Y4, balance of the investment in Silva Company stock account.$fill in…
Entries for equity investments: 20%–50% ownership On January 4, 20Y4, Ferguson Company purchased 100,000 shares of Silva Company's common stock directly from one of the founders for a price of $51 per share. Silva has 400,000 shares outstanding, including the Daniels shares. On July 2, 20Y4, Silva paid $270,000 in total dividends to its shareholders. On December 31, 20Y4, Silva reported a net income of $934,000 for the year. Question Content Area a. Journalize the Ferguson Company entries for the transactions involving its investment in Silva Company during 20Y4. If an amount box does not require an entry, leave it blank. 20Y4, Jan. 4 - Select - - Select - - Select - - Select - 20Y4, July 2 - Select - - Select - - Select - - Select - 20Y4, Dec. 31 - Select - - Select - - Select - - Select - Question Content Area b. Determine the December 31, 20Y4, balance of Investment in Silva Company Stock.$fill in the blank…

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