Entries for equity investments: 20%–50% ownership On January 4, 20Y4, Ferguson Company purchased 480,000 shares of Silva Company’s common stock directly from one of the founders for a price of $30 per share. Silva has 1,200,000 shares outstanding, including the Daniels shares. On July 2, 20Y4, Silva paid $750,000 in total dividends to its shareholders. On December 31, 20Y4, Silva reported a net income of $2,000,000 for the year. a. Journalize the Ferguson Company entries for the transactions involving its investment in Silva Company during 20Y4. If an amount box does not require an entry, leave it blank. 20Y4, Jan. 4 Investment in Silva Company Stock fill in the blank 1fca1107203ffe1_2 fill in the blank 1fca1107203ffe1_3 Cash fill in the blank 1fca1107203ffe1_5 fill in the blank 1fca1107203ffe1_6 20Y4, July 2 Cash fill in the blank 1fca1107203ffe1_8 fill in the blank 1fca1107203ffe1_9 Investment in Silva Company Stock fill in the blank 1fca1107203ffe1_11 fill in the blank 1fca1107203ffe1_12 20Y4, Dec. 31 Investment in Silva Company Stock fill in the blank 1fca1107203ffe1_14 fill in the blank 1fca1107203ffe1_15 Income of Silva Company fill in the blank 1fca1107203ffe1_17 fill in the blank 1fca1107203ffe1_18 Feedback a. Jan 4: Record the investment at cost. July 2: Calculate the ownership percentage. Under the equity method of accounting for investments, the dividends earned affect the investment account. Dec. 31: Calculate the ownership percentage. Under the equity method of accounting for investments, the share of income affects the investment account. b. Determine the December 31, 20Y4, balance of the investment in Silva Company stock account. $fill in the blank 19c4e8f8f05c064_1

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter15: Shareholders’ Equity: Capital Contributions And Distributions

Section: Chapter Questions

Problem 27P

See similar textbooks

Related questions

Question

Entries for equity investments: 20%–50% ownership

On January 4, 20Y4, Ferguson Company purchased 480,000 shares of Silva Company’s common stock directly from one of the founders for a price of $30 per share. Silva has 1,200,000 shares outstanding, including the Daniels shares. On July 2, 20Y4, Silva paid $750,000 in total dividends to its shareholders. On December 31, 20Y4, Silva reported a net income of $2,000,000 for the year.

a. Journalize the Ferguson Company entries for the transactions involving its investment in Silva Company during 20Y4. If an amount box does not require an entry, leave it blank.

20Y4, Jan. 4	Investment in Silva Company Stock	fill in the blank 1fca1107203ffe1_2	fill in the blank 1fca1107203ffe1_3
	Cash	fill in the blank 1fca1107203ffe1_5	fill in the blank 1fca1107203ffe1_6
20Y4, July 2	Cash	fill in the blank 1fca1107203ffe1_8	fill in the blank 1fca1107203ffe1_9
	Investment in Silva Company Stock	fill in the blank 1fca1107203ffe1_11	fill in the blank 1fca1107203ffe1_12
20Y4, Dec. 31	Investment in Silva Company Stock	fill in the blank 1fca1107203ffe1_14	fill in the blank 1fca1107203ffe1_15
	Income of Silva Company	fill in the blank 1fca1107203ffe1_17	fill in the blank 1fca1107203ffe1_18

Feedback

Jan 4: Record the investment at cost.

July 2: Calculate the ownership percentage. Under the equity method of accounting for investments, the dividends earned affect the investment account.

Dec. 31: Calculate the ownership percentage. Under the equity method of accounting for investments, the share of income affects the investment account.

b. Determine the December 31, 20Y4, balance of the investment in Silva Company stock account.
$fill in the blank 19c4e8f8f05c064_1

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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