Homework Help is Here – Start Your Trial Now!
Business
Accounting
Assets Liabilities and Equity $ 60,000 100,000 350,000 Accounts payable ... Common stock ($5 par)... Paid-in capital in excess of par Retained earnings .. Totalliabilities and equity ..... $ 60,000 50,000 100,000 150,000 Current assets Land...... Equipment Accumulated depreciation Total assets.... (150,000) $ 360,000 $360,000 Appraisals indicate that accounts are fairly stated except for the equipment, which has a fair value of $240,000 and a remaining life of five years. Any remaining excess is goodwill. Huron Company experiences the following changes in retained earnings during 2015 and 2016: Retained earnings, January 1,2015. Net income, 2015..... Dividends paid in 2015.... $150,000 $ 50,000 (10,000) 40,000 Balance, December 31,2015 $190,000 Net income, 2016...... Dividends paid in 2016. $ 45,000 (10,000) 35,000 $225,000 Balance, December 31,2016 ....

Assets Liabilities and Equity $ 60,000 100,000 350,000 Accounts payable ... Common stock ($5 par)... Paid-in capital in excess of par Retained earnings .. Totalliabilities and equity ..... $ 60,000 50,000 100,000 150,000 Current assets Land...... Equipment Accumulated depreciation Total assets.... (150,000) $ 360,000 $360,000 Appraisals indicate that accounts are fairly stated except for the equipment, which has a fair value of $240,000 and a remaining life of five years. Any remaining excess is goodwill. Huron Company experiences the following changes in retained earnings during 2015 and 2016: Retained earnings, January 1,2015. Net income, 2015..... Dividends paid in 2015.... $150,000 $ 50,000 (10,000) 40,000 Balance, December 31,2015 $190,000 Net income, 2016...... Dividends paid in 2016. $ 45,000 (10,000) 35,000 $225,000 Balance, December 31,2016 ....

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Cardinal Company acquires an 80% interest in Huron Company common stock for $420,000 cash on January 1, 2015. At that time, Huron Company has the following balance sheet: (attached)

Prepare a determination and distribution of excess schedule for the investment in Huron Company (a value analysis is not needed). Prepare journal entries that Cardinal Company would make on its books to record income earned and/or dividends received on its investment in Huron Company during 2015 and 2016 under the following methods: simple equity, sophisticated equity, and cost.

Assets Liabilities and Equity $ 60,000 100,000 350,000 Accounts payable ... Common stock ($5 par)... Paid-in capital in excess of par Retained earnings .. Totalliabilities and equity ..... $ 60,000 50,000 100,000 150,000 Current assets Land...... Equipment Accumulated depreciation Total assets.... (150,000) $ 360,000 $360,000 Appraisals indicate that accounts are fairly stated except for the equipment, which has a fair value of $240,000 and a remaining life of five years. Any remaining excess is goodwill. Huron Company experiences the following changes in retained earnings during 2015 and 2016: Retained earnings, January 1,2015. Net income, 2015..... Dividends paid in 2015.... $150,000 $ 50,000 (10,000) 40,000 Balance, December 31,2015 $190,000 Net income, 2016...... Dividends paid in 2016. $ 45,000 (10,000) 35,000 $225,000 Balance, December 31,2016 ....
Transcribed Image Text:Assets Liabilities and Equity $ 60,000 100,000 350,000 Accounts payable ... Common stock ($5 par)... Paid-in capital in excess of par Retained earnings .. Totalliabilities and equity ..... $ 60,000 50,000 100,000 150,000 Current assets Land...... Equipment Accumulated depreciation Total assets.... (150,000) $ 360,000 $360,000 Appraisals indicate that accounts are fairly stated except for the equipment, which has a fair value of $240,000 and a remaining life of five years. Any remaining excess is goodwill. Huron Company experiences the following changes in retained earnings during 2015 and 2016: Retained earnings, January 1,2015. Net income, 2015..... Dividends paid in 2015.... $150,000 $ 50,000 (10,000) 40,000 Balance, December 31,2015 $190,000 Net income, 2016...... Dividends paid in 2016. $ 45,000 (10,000) 35,000 $225,000 Balance, December 31,2016 ....
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 5 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Investments and Financial instruments
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS