Chapter 15Investments and Fair Value Accounting713EX 15-11Equity method for stock investment0On January 4, 2016, Spandella Company purchased 175,000 shares of Filington CompanyOBJ. 3directly from one of the founders for a price of $30 per share. Filington has 500,000shares outstanding, including the Penman shares. On July 2, 2016, Filington paid $620,000in total dividends to its shareholders. On December 31, 2016, Filington reported a netincome of $1,050,000 for the year. Spandella uses the equity method in accounting forits investment in Filington.a. Provide the Spandella Inc. journal entries for the transactions involving its investmentin Filington Inc. during 2016.b.Determine the December 31, 2016, balance of the Investment in Filington Company.Stock account.OBJ.3Bulldog Co. purchased 34% of the outstanding stock of Gator Co.all shareholders on June 30.EX 15-12Equity method for stock investment with loss

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Asked Dec 1, 2019
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Chapter 15
Investments and Fair Value Accounting
713
EX 15-11
Equity method for stock investment
0On January 4, 2016, Spandella Company purchased 175,000 shares of Filington Company
OBJ. 3
directly from one of the founders for a price of $30 per share. Filington has 500,000
shares outstanding, including the Penman shares. On July 2, 2016, Filington paid $620,000
in total dividends to its shareholders. On December 31, 2016, Filington reported a net
income of $1,050,000 for the year. Spandella uses the equity method in accounting for
its investment in Filington.
a. Provide the Spandella Inc. journal entries for the transactions involving its investment
in Filington Inc. during 2016.
b.Determine the December 31, 2016, balance of the Investment in Filington Company.
Stock account.
OBJ.3
Bulldog Co. purchased 34% of the outstanding stock of Gator Co.
all shareholders on June 30.
EX 15-12
Equity method for stock investment with loss
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Chapter 15 Investments and Fair Value Accounting 713 EX 15-11 Equity method for stock investment 0On January 4, 2016, Spandella Company purchased 175,000 shares of Filington Company OBJ. 3 directly from one of the founders for a price of $30 per share. Filington has 500,000 shares outstanding, including the Penman shares. On July 2, 2016, Filington paid $620,000 in total dividends to its shareholders. On December 31, 2016, Filington reported a net income of $1,050,000 for the year. Spandella uses the equity method in accounting for its investment in Filington. a. Provide the Spandella Inc. journal entries for the transactions involving its investment in Filington Inc. during 2016. b.Determine the December 31, 2016, balance of the Investment in Filington Company. Stock account. OBJ.3 Bulldog Co. purchased 34% of the outstanding stock of Gator Co. all shareholders on June 30. EX 15-12 Equity method for stock investment with loss

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a. Record journal entries for the transactions of invest...

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Post Ref.Debit (S) Credit (S) Accounts title and explanation Date Investments in Filington - Equity method 04-Jan-16 (175,000x$30) $5,250,000 $5,250,000 Cash (To record purchase of shares in Filington company) 02-Jul-16 Cash [$620,000x(175,000-500,000)] Investments in Filington - equity method (To record receipt of dividends from Filington) $217,000 $217,000 Investment in Filington |31-Dec-16 S1,050,000-$620,000) x35%] $150,500 $150,500 Equity income of associates (To record net income from investment in associates)

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