Bramble Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $ 1,294,800 for  49,800 shares. Kulikowski Inc. declared and paid an $ 0.75 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $ 764,000 for 2021. The fair value of Kulikowski’s stock was $ 29 per share at December 31, 2021.   At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31, 2021? What is the total net income reported in 2021 under each of these methods?     Fair Value Method   Equity Method Investment amount (balance sheet)   $    $  Dividend revenue (income statement)         Unrealized holding gain (income statement)         Investment income (income statement)

Q: On December 31, 2020, GHI Corporation holds 50,000 shares of Harry Company with market value of…

A: Unrealized gain means the upsurge in the worth of an asset or security which is yet to sold for…

Q: The entry to record the declaration of the dividend would include a debit to Retained Earnings of

A: Given that: Purchase price of 20,000 shares = P300,000 Market price of shares = P500,000

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A: (A)  amount of equity method income would Matthew recognize in 2021 from its ownership interest in…

Q: Pharoah Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31,…

A: Journal entry is the process of recording the business transactions in the books of accounts for the…

Q: epare the journal entries for Grouper for 2019 and 2020, assuming that Grouper cannot exercise…

A:

Q: On December 31, 2020, DEF, Inc. holds 100,000 shares of Devin Company with market value of…

A: Gain or loss is the amount of money gained or lost on investment. If the money invested give more…

Q: On January 1, 2021, Manette Company acquired 100,000 ordinary shares of Nette Company for…

A: Solution: Manette should recognized in profit or loss for the year 2021 = Income of Netter company *…

Q: Marcus Company made the following transactions in the ordinary shares of Cato Company designated as…

A: Capital gain or capital loss is incurred on the sale of capital asset of an individual. Capital gain…

Q: Rome Inc. acquired 50,000 ordinary shares of Egypt Company at P120 per share. On February 14, 2020,…

A: Shareholder means the owner of the company who is holding share in its name. Right share means where…

Q: How much was the gain or loss on sale of investment on January 1, 2020? a. P1,575 loss b. P1,575…

A: Company can control another company by having the control which is significant to control and…

Q: On January 1, 2021, Family Company purchased 10% of San Company's 100,000 outstanding ordinary…

A: Reported Income : Consequently, the investor's part of the joint venture's revenues and losses is…

Q: Bramble Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31,…

A: Adjusting journal entry: At year-end when the company finalizes its accounts then any unrecognized…

Q: During the year 2021, David Company purchased 1,000 shares of Goliath Company ordinary shares at…

A: Value of investment on 31 dec 2022  = (1,000-400)x200 = P120,000 Value of investment on 31 dec 2021…

Q: On December 31, 2020, R papa Company, an entity with no subsidiary, purchased 10,000 ordinary shares…

A: An investment in other entity can be recorded using two methods; 1) Fair value method, and 2) Equity…

Q: During the year 2021, Pal Company purchased 1,000 shares of Pak Company ordinary shares at P150 per…

A: No. of shares held as on December 31, 2022:   No. of shares Shares purchased in the year 2021…

Q: MANGO Company acquired 4,000 shares of KIWI Corporation ordinary shares on April 2, 2020 at a cost…

A: The trading investment is recognized at FVTPL and any changes in their fair value are recognized in…

Q: Matthew, Inc., owns 30 percent of the outstanding stock of Lindman Company and has the ability to…

A: Part 1:

Q: During the year 2021,David Company purchased 1,000 shares of Goliath Company ordinary shares at P150…

A: The shares designated to be valued at fair value through other comprehensive income are to be…

Q: Pascual Corp. owned 20,000 ordinary shares of Alegrado Corp., purchased in 2018 for P1,800,000. On…

A: The questions are multiple choice questions. Required  Choose the Correct Option.

Q: During the year 2021, Pal Company purchased 1,000 shares of Pak Company ordinary shares at P150 per…

A: It is pertinent to note that securities held for trading purposes are measured at fair value through…

Q: During the year 2021, David Company purchased 1,000 shares of Goliath Company ordinary shares at…

A: The shares designated to be valued at fair value through other comprehensive income are to be…

Q: On January 1, 2021, ABC purchased 80% of the outstanding shares of DEF at a cost of P960,000. On…

A: Non-controlling interest is the minority interest where shareholders hold less than 50% of the…

Q: On January 1, 2021, Family Company purchased 10% of San Company's 100,000 outstanding ordinary…

A: Total income includes any increase in value of investment and share of dividend received.

Q: Grouper Inc. acquired 10% of the outstanding common shares of Gregson Inc. on December 31, 2019. The…

A: Step1 Under equity method, return is not accountable, i.e., dividend is not considered and in fair…

Q: Matthew, Inc., owns 30 percent of the outstanding stock of Lindman Company and has the ability to…

A: Equity Method: It is a method applied when one company has 20% to 50% ownership in another company.…

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A: 1) journal entries for Heidebrecht Design for 2020 assuming Heidebrecht Design cannot exercise…

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Q: On January 1. 2021, Family Company purchased 10% of San Company's 100,000 outstanding ordinary…

A: An increase in fair value of 10% interest which is acquired on January 1, 2021 is not reported as…

Q: On January 1, 2021, ABC purchased 80% of the outstanding shares of DEF at a cost of P960,000. On…

A: Non-controlling interest is the minority interest where shareholders hold less than 50% of the…

Q: On January 1, 2021, Sledge had common stock of $240,000 and retained earnings of $380,000. During…

A: Non Controlling Interest - It is type of interest in the company where shareholder owns less than…

Q: On July 1, 2020, Allen Corporation purchased 30% of the 84,000 outstanding common shares of Towne…

A: Significant influence means the power or right to participate in the policy decisions of the…

Q: During the year 2021,David Company purchased 1,000 shares of Goliath Company ordinary shares at P150…

A:

Q: On June 1, 2020, Ping Corp. purchased 10,000 of Pong's 50,000 outstanding shares at a price of P6.00…

A: The correct statement is

Q: On January 2, 2020, Black Company purchased 17% of Rock Company's common stock for $51,000. Rock's…

A: Investment means engaging the funds to generate income for the coming years. Investment can be made…

Q: On February 2, 2020, Groove Company purchased 15% of Pop Company's common stock for $54,000. Pop's…

A:

Q: On January 2, 2020, Howdy Doody Corporation purchased 17% of Ranger Corporation's common stock for…

A: The investment income is recorded in the income statement for dividend revenue or income due to…

Q: standing common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $…

A: Given : Purchase price was $ 1,245,600 for 51,900 shares. declared and paid an $ 0.85 per share…

Q: At the beginning of 2021, Nobela Corporation bought 15% ownership stake in Joseph Corporation for…

A: In the investment of associate, we valued the investment value at the end of each year by the equity…

Q: Pharoah Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31,…

A: Under the fair value method, the stock is reported at their fair values on the Balance Sheet date.…

Q: On January 2, 2020, Samantha Company bought 10% of Camille Company's outstanding ordinary shares for…

A: The amount that Samantha Co. should report as investment in Camille Co. is as Follows.

Q: Bramble Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31,…

A: Solution:  journal entries for Bramble Inc. for 2020 and 2021 are as under:

Q: On January 1, 2021 ABC purchased 80% of the outstanding shares of DEF at a cost of $960,000. On that…

A: Non-controlling interest is the interest in the subsidiary entity of an entity other than the parent…

Q: 1. On July 1, 2021, Rich sold half of its stock in Doane for 396,000 cash. Before income taxes, what…

A: Income from investment to be included in the income statement: Our share of income in the company in…

Q: On January 1, 2019, Long Corporation acquired 30% of the outstanding common shares of Feeley…

A: Part 1:

Q: how much should MANGO report as gain or loss on sale of investment?

A: The management sometimes invests in the stock market to acquire other corporations' shares for the…

Q: ILA Company agreed to pay $850,000 cash and issue 50,000 shares of its $10 par (20 current fair…

A: Step 1 In business combination, when the number of shares is issued, they are generally issued   at…

Q: On December 1, 2020, Citrus purchased 200,000 shares representing 45 percent of the outstanding…

A: Citrus long term investment in Berry should be shown in Citrus December 31, 2020, statement of…

Q: r market values. Assume income was earned evenly throughout the year except for the intercompany…

A: The balance sheet is a statement prepared to ascertain the true position of assets and liabilities…

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A: Property Dividends given = 20,000 / 10 = 2000 shares

Q: On December 1, 2020, Citrus purchased 200.000 shares representing 45 percent of the outstanding…

A: Solution: Citrus long term investment in Berry should be shown in Citrus December 31, 2020,…

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.