← → C←MB<SQGraded Homework Assignmen XQ Search the web...2Wreader.yuzu.com/reader/books/9781305464803/income distribution schedules.PROBLEMSCommon stock ($5 par)..Common stock ($10 par).Yuzu: Advanced Accounting, 12e x +Problem 8-1 (LO 1) Stock dividend, subsidiary stock sales, equity method. OnJanuary 1, 2015, Wells Corporation acquires 8,000 shares of Towne Company stock and18,000 shares of Sara Company stock for $176,000 and $240,000, respectively. Each invest-ment is acquired at a price equal to the subsidiary's book value, resulting in no excesses.Towne Company and Sara Company have the following stockholders' equities immediatelyprior to Wells's purchases:Type here to searchPaid-in capital in excess of parRetained earningsTotal stockholder's equity.34E발23.1 Cexi/492RCopyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.%5YTowneCompany$ 50,000X100,00070,000$220,000&WSaraCompany$300,000[7]100,000$400,000Ohp848005H9 → CQ Search the web...Graded Homework Assignmen X470reader.yuzu.com/reader/books/9781305464803/pageid/493Required ► ► ► ► ►Type here to searchYuzu: Advanced Accounting, 12e X +3Additional information is as follows:a. Net income for Towne Company and Sara Company for 2015 and 2016 follows (income isassumed to be earned evenly throughout the year):Towne Company.Sara Companyb. No cash dividends are paid or declared by Towne or Sara during 2015 and 2016.c. Towne Company distributes a 10% stock dividend on December 31, 2015. Towne stock isselling at $25 per share when the stock dividend is declared.d. On July 1, 2016, Towne Company sells 2,750 shares of stock at $35 per share. Wells Cor-poration purchases none of these shares.e. Sara Company sells 5,000 shares of stock on July 1, 2015, at $25 per share. Wells Corpora-tion purchases 3,700 of these shares.etPart 1 COMBINED CORPORATE ENTITIES AND CONSOLIDATIONSf. On January 1, 2016, Sara Company purchases 5,000 shares of its common stock from non-controlling interests at $20 per share.%Assume Wells Corporation uses the simple equity method for its investments in subsidiaries.For 2015 and 2016, record each of the adjustments to the investment accounts. Provide allporting calculations in good form.sup-Problem 8-2 (LO 1) Stock dividend. subsidiary stock sales. cost method. On Janu-516@NOX2015$50,00040,0007W2016$50,00040,000hp789f10DS44°F

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Description: ← → C←MB<SQGraded Homework Assignmen XQ Search the web...2Wreader.yuzu.com/reader/books/9781305464803/income distribution schedules.PROBLEMSCommon stock ($5 par)..Common stock ($10 par).Yuzu: Advanced Accounting, 12e x +Problem 8-1 (LO 1) Stock divi

Straightforward equity approach: In this method, investments made by entities are initially reported…

Business

Accounting

Assume Wells Corporation uses the simple equity method for its investments in subsidiaries. For 2015 and 2016, record each of the adjustments to the investment accounts. Provide all sup- porting calculations in good form.