Farmer Corporation purchases 30% of the common stock of Jackson, Inc. at a purchase price of $13.5 million cash. Farmer has no significant influence over Jackson. During the year, Jackson reports net income of $1,800,000 and pays $340,000 of cash dividends. At the end of the year, the market value of Farmer's investment is $14.8 million. What is the year-end balance of the equity investment in Jackson reported on the Balance Sheet? Answer: Next page
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- Champaign Corporation purchases 45% of the common stock of Rockville, Inc. at a purchase price of $17.3 million cash. During the year, Rockville reports net income of $2,368,000 and pays $435, 200 of cash dividends. At the end of the year, the market value of Champaign's investment is $19.0 million. What is the year-end balance of the equity investment in Rockville? Select one: a. $20, 103, 200 b. $18, 169, 760 c. None of these are correct d. $17,300,000 e. $ 20,932,800Madison Corporation purchases an investment in Lake Geneva, Inc. at a purchase price of $20 million cash, representing 40% of the book value of Lake Geneva, Inc. During the year, Lake Geneva reports net income of $3,400,000 and pays $838,000 of cash dividends. At the end of the year, the market value of Madison’s investment is $24 million. What is the year-end balance of the equity investment in Lake Geneva? Select one: a. $21,024,800 b. $24,000,000 c. $20,000,000 d. $22,562,000 e. $21,360,000Marigold Corporation purchased 420 shares of Nolan Inc. common stock for $14,200 (Marigold does not have significant influence). During the year, Nolan paid a cash dividend of $3.25 per share. At year-end, Nolan stock was selling for $35.00 per share. (a) Prepare Marigold's journal entry to record the purchase of the investment. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit
- Tamarisk Corporation purchased 380 shares of Sherman Inc. common stock for $13,300 (Tamarisk does not have significant influence). During the year, Sherman paid a cash dividend of $3.25 per share. At year-end, Sherman stock was selling for $37.00 per share.Prepare Tamarisk's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (Marigold Corporation purchased 440 shares of Sherman Inc. common stock for $14,400 (Marigold does not have significant influence). During the year, Sherman paid a cash dividend of $3.25 per share. At year-end, Sherman stock was selling for $37.00 per share.Prepare Marigold's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.)Carla, Inc. purchased 1,810 shares of Oneida Corporation common stock for $84,600. During the year. Oneida paid a cash dividend of $1.10 per share. At year-end, Oneida stock was selling for $43.90 per share. Prepare Carla's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) (a) (b) (c) Account Titles and Explanation Debit Credit
- Kross company purchases an equity investment in Penno Company at a purchase price of 5,000,000 millions, representing 34% of the outstanding stock and book value of Penno. During the year, Penno reports net income of 600,000 and pays cash dividends of 200,000. At the end of the year, the market value of Kross's investment is 5,300,000. What amount of income does Kross report relating to this investment in Penno for the year?Berk Company engaged in the following investment transactions during the current year. April 1 July 1 Bought 40,000 of the 100,000 outstanding shares of Apex Company for $400,000. During the year, Apex Company reported net income of $30,000, and paid dividend of $10,000. Bought a $270 million bond with 8% interest rate. The market interest rate was 6% for bonds of similar risk and maturity. Berk paid $310 million for the bonds. The company will receive interest semiannually on June 30 and December 31. The fair value of the bonds at December 31 was $240 million. Dec 31 Required: 1. Beck has significance influence over Apex's management. On December 31, how much would Berk report as the value of its investment in Apex on the balance sheet? 2. Berk intends to actively trade the bond investment. a. Prepare the journal entries related to the bond on July 1 and on December 31. b. On December 31, how much would Berk report as the value of the bond on The balance sheet Please avoid…Ayayai Corporation purchased 420 shares of Sherman Inc. common stock for $12,300 (Ayayai does not have significant influence). During the year, Sherman paid a cash dividend of $3.50 per share. At year-end, Sherman stock was selling for $31.50 per share. Prepare Ayayai's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Account Titles and Explanation (a) (b) (c) Debit Credit
- Swifty Corporation purchased 400 shares of Sherman Inc. common stock for $14,100 (Swifty does not have significant influence). During the year, Sherman paid a cash dividend of $3.25 per share. At year-end, Sherman stock was selling for $35.50 per share. Assume the stock is nonmarketable. Prepare Swifty's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) No. Account Titles and Explanation (a) (b) (c) Equity Investments Cash Cash Dividend Revenue Fair Value Adjustment Unrealized Holding Gain or Loss -Income Debit 14,100 1,300 100 Credit 14,100 1,300 100Sunland Corporation purchased 370 shares of Sherman Inc. common stock for $ 13,100 ( Sunland does not have significant influence). During the year, Sherman paid a cash dividend of $ 3.00 per share. At year-end, Sherman stock was selling for $ 37.50 per share.Prepare Sunland's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation Debit Credit (a) enter an account title to record the purchase of the investment enter a debit amount enter a credit amount enter an account title to record the purchase of the investment enter a debit amount enter a credit amount (b) enter an account title to record…Sunland Corporation purchased 400 shares of Sherman Inc. common stock for $12,400 (Sunland does not have significant influence). During the year, Sherman paid a cash dividend of $3.00 per share. At year-end, Sherman stock was selling for $31.50 per share. Assume the stock is nonmarketable. Prepare Sunland's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Account Titles and Explanation (a) (b) (c) Debit Credit
