On January 1, Year 5, Anderson Corporation paid $864,000 for 27,000 (20%) oftheoutstanding shares of Carter Inc. The investment was considered to be one ofsignificantinfluence. In Year 5, Carter reported profit of $102,000; in Year 6, its profitwas $112.00O. Dividends paidwere $67,000 in each of the two years.Required ACalculate the balance in Anderson's investment account as at December 31, Year 6.

Under the equity method investor need to recognize ( add) the share of profits of the investee and…

Answered: On January 1, Year 5, Anderson…

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

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 8RE

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Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Refer to the information for Juroe Company on the previous page. Also, assume that Juroes total assets at the beginning of last year equaled 17,350,000 and that the tax rate applicable to Juroe is 40%. Required: Note: Round answers to two decimal places. 1. Calculate the average total assets. 2. Calculate the return on assets.
On May 1, Republic Corporation purchased 400 shares of stock for P114 per share and held it as FVTPL financial assets. The price decreased to P106 per share on August 1 and then increased to P122 on December 31. During the year, the company received dividends of P3.50 per share. At what amount should the investment be valued in the December 31 balance sheet?
Andrew Company purchased 800 ordinary shares of Valley Industries as a trading investment for P148,800. During the year, Valley Industries paid a cash dividend of P32 per share. At year-end, Valley’s shares were selling for P174 per share. In the income statement for the current year-end, what net amount of unrealized gain/loss and dividend revenue should be reported by Andrew Company?
Aylmer Corp has the following transactions relating to investments. Aylmer Corp has a December 31 year end. 01-Sep-19 Aylmer Corp purchased 3,100 shares of Belmont Inc at $13.00 per share. 31-Oct-19 Belmont Inc paid dividends of $5.00 per share. 31-Dec-19 Belmont Inc shares had a fair value of $12.00 per share. 31-Dec-19 Belmont Inc reported net income of $63,000 for the year. 01-Mar-20 Aylmer Corp sold all of Belmont Inc shares for $17.00 per share. Additional Information: Assume Aylmer Corp uses the fair value through other comprehensive income (FV-OCI) method to account for its investments. Dividend income is required to be recorded in a separate account. REQUIRED: Prepare the appropriate entries for the above transactions.
As of the beginning of the year, Devers, Inc. acquired common stock of Verdugo Limited at book value. During the current year, Verdugo earned $12.5 million and declared dividends of $4 million. Indicate the amount shown for Investment in Verdugo on Devers Inc.’s balance sheet on December 31 and the amount of total income Devers would report on the income statement for the year related to its investment under the assumption that Devers did the following: A. Paid $2 million for a 10-percent interest in Verdugo and classifies the investment as a passive investment. The fair value of the investment at December 31st was now $2.3 million. B. Paid $7 million for a 35-percent interest in Verdugo and uses the equity method. The fair value of the investment at December 31st was now $7.3 million. Please dont provide handwritten or image based answers thank you
Ayayai Corporation purchased 300 common shares of Sigma Inc. for trading purposes for $9,300 on September 8 and accounted for the investment under ASPE at FV-NI. In December, Sigma declared and paid a cash dividend of $1.65 per share. At year end, December 31, Sigma shares were selling for $35.60 per share. In late January, Ayayai sold the Sigma shares for $34.60 per share. Prepare Ayayai Corporation’s journal entry to record the purchase of the investment. (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 Account Titles and Explanation Debit Credit September 8 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount Prepare Ayayai Corporation’s journal entry to record the dividends received. (Credit…
On December 30, Year 3, Varsity Corporation sold its investment in marketable equity securities costing $800,000 for $860,000 cash. The securities were purchased on January 2, Year 1, and the market value of the securities was $820,000 and $780,000 on December 31, Year 1 and Year 2, respectively. How much gain or loss will Varsity report in its income statement for the year ending December 31, Year 3? Multiple Choice A $40,000 gain. An $80,000 gain. A $20,000 loss. A $60,000 gain..
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On January 1, Aivah Company purchased 2,000 common shares (25%) of Maywood Corporation as a long-term investment for $235,000. Later in the year, Maywood paid $23,000 in total cash dividends on December 15 and reported net income of $74,000 for the year ended December 31. Determine the amount reported as an equity method investment on Aivah's December 31 balance sheet. Balance
On January 1, Ivanhoe Corporation purchased a 25% equity in Helbert Corporation for $152,000. At December 31, Helbert declared and paid a $44,700 cash dividend and reported net income of $196,500. Determine the amount to be reported as an investment in Helbert stock at December 31. Investment in Helbert, December 31 $
On January 1, Vienna Corporation purchased 40% of the outstanding common stock of the Marietta Corporation for $137,500. During the year, Marietta Corporation reported net income of $50,000 and paid cash dividends of $25,000.The balance of the Investment in the Marietta Corporation account on the books of Vienna Corporation at year-end is: Select one: A. $147,500 B. $135,000 C. $100,000 D. $110,000
During the year, Cellular Land, Inc. issued 1,500 shares of its $0.50 stated value common stock for $15 per share, and declared and paid cash dividends totaling $0.25 per share. By what amount does contributed capital increase as a result of these events? $22,500 $750 $21,750 $22,125

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