On January 1, Vermillion Corporation, a private company that reports under ASPE, purchased 25% of Hook Ltd. common shares for $731,000. At December 26, Hook declared a $40,000 dividend (Vermillion received its share of that dividend on the same day) and reported net income of $72,000. The shares' fair value at December 31 was $769,000. It has chosen to account for its investment in Hook Ltd, using the cost model because the shares do not trade in an active market. Record each of the transactions and any necessary adjusting journal entries under this assumption. (List all debit entries before credit entries, Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Jan 1 # Dec. 26: Account Titles and Explanation How much income would Vermillion now report for the year? Income $ Debit Credit

On January 1, Vermillion Corporation, a private company that reports under ASPE, purchased 25% of Hook Ltd. common shares for $731,000. At December 26, Hook declared a $40,000 dividend (Vermillion received its share of that dividend on the same day) and reported net income of $72,000. The shares' fair value at December 31 was $769,000. It has chosen to account for its investment in Hook Ltd, using the cost model because the shares do not trade in an active market. Record each of the transactions and any necessary adjusting journal entries under this assumption. (List all debit entries before credit entries, Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Jan 1 # Dec. 26: Account Titles and Explanation How much income would Vermillion now report for the year? Income $ Debit Credit

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 4MC: Effective May 1, the shareholders of Baltimore Corporation approved a 2-for-1 split of the companys...

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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
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