EXERCISE 4-7On January 1, 2020, Levesque Co. purchased 500,000 ordinary shares ofRowland Co. at P14 per share, representing a 25% ownership in Rowland. Thisallowed Levesque to exercise significant control over Rowland. Rowland declaredand paid dividends of P1 and P2 in 2020 and 2021, respectively. At the end of 2020and 2021, Rowland's shares were trading at P15 and P17 per share. Rowland's netincome in 2020 and 2021 was P2,400,000 and P3,200,000, respectively.1. Determine the investment income recognized by Levesque in 2020 and 2021.2. Determine the carrying amount of Levesque's investment on December 31,2020, and December 31, 2021.

Introduction: Investment income is described as the amount which a person or institution gains on…

Answered: ary 1, 2020, Levesque Co. purchased…

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter13: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 28EX

See similar textbooks

Similar questions

Exercise 1-41 Stockholders Equity OBJECTIVE o On January 11 2019, Mulcahy Manufacturing Inc., a newly formed corporation, issued 1,000 shares of common stock in exchange for $150,000 cash. No other shares were issued during 2019, and no shares were repurchased by the corporation. On November 1, 2019, the corporations major stockholder sold 300 shares to another stockholder for $50000. The corporation reported net income of $37,500 for 2019. Required: Prepare the stockholders equity section of Mulcahys balance sheet at December 31, 2019.
Cary Corporation has 50,000 shares of 10 par common stock authorized. The following transactions took place during 2019, the first year of the corporations existence: Sold 5,000 shares of common stock for 18 per share. Issued 5,000 shares of common stock in exchange for a patent valued at 100,000. At the end of Carys first year, total contributed capital amounted to: a. 40,000 b. 90,000 c. 100,000 d. 190,000
Common Dividends Fusion Payroll Service began 2019 with 1,200,000 authorized and 375,000 issued and outstand ing $5 par common shares. During 2019, Fusion entered into the following transactions: Declared a S0.30 per-share cash dividend on March 10. Paid the $0.30 per-share dividend on April 10. Repurchased 8,000 common shares at a cost of $18 each on May 2. Sold 1.500 unissued common shares for $23 per share on June 9. Declared a $0.45 per-share cash dividend on August 10. Paid the $0.45 per-share dividend on September 10. Declared and paid a 5% stock dividend on October 15 when the market price of the common stock was $25 per share. Declared a $0.50 per-share cash dividend on November 10. Paid the $0.50 per-share dividend on December 10. Required: Prepare journal entries for each of these transactions. (Note: Round to the nearest dollar.) Determine the total dollar amount of dividends (cash and stock) for the year. CONCEPTUAL CONNECTION Determine the effect on total assets and total stockholders equity of these dividend transactions.

Recommended textbooks for you

Financial & Managerial Accounting

Accounting

ISBN:

9781285866307

Author:

Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:

Cengage Learning

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Accounting (Text Only)

Accounting

ISBN:

9781285743615

Author:

Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:

Cengage Learning

Financial & Managerial Accounting

Accounting

ISBN:

9781285866307

Author:

Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:

Cengage Learning

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Accounting (Text Only)

Accounting

ISBN:

9781285743615

Author:

Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:

Cengage Learning

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

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

Publisher:

Cengage Learning

Corporate Financial Accounting

Accounting

ISBN:

9781305653535

Author:

Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:

Cengage Learning

Financial Accounting: The Impact on Decision Make…

Accounting

ISBN:

9781305654174

Author:

Gary A. Porter, Curtis L. Norton

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS