Fred owns 25% of Eaton and at January 1, 2020 has a balance in its Investment account of $40,000. In 2020 Eaton reports a net loss of $200,000. a. What is balance of Fred’s Investment in Eaton at December 31, 2020 b. How much will Eaton need to earn in 2021 before Fred can return to using the equity method

Q: John Reardon purchased 100 shares of Tomco Corporation in December 2019 at a total cost of $1,762.…

A: The capital gain realized is calculated as the difference of sale price and buying price. Holding…

Q: Pharoah Company owns 3200 of the 10000 outstanding shares of Sheridan Corporation common stock.…

A: % of shares = No. of shares hold / Total outstanding shares of Sheridan Corporation = 3200/10000 =…

Q: rgin Inc. owns 30% of the outstanding voting common stock of Burkes Co. and has the ability to…

A: In order to find the amount of equity income that Bargin Inc should recognize in 2021 we should…

Q: Last year at this time, Rohan purchased 2,000 shares at $45/share in Boom Inc. In 2021, he received…

A: To solve the question, we first need to determine the total buy value, total sale value and total…

Q: Boxer Company owned 20,000 shares of King Company that were purchased in 2019 for $500,000. On May…

A:

Q: Five years ago Gerald invested $198,000 in a passive activity, his sole investment venture. On…

A: As posted multiple sub parts we are answering only first three sub parts kindly repost the…

Q: On June 15, 2020, Brainiac Company purchased 8 shares of Lovely Company for $6 per share.  The…

A: Introduction: If investments in equity shares are less than 20%, then such investment is carried at…

Q: Sid bought shares in an office supply company for $50 a share in Octol shares paid semi-annual…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: On January 2, 2019 Sona bought 10 lots (1,000 stocks) of COPA at $10,000,000. During that year, she…

A: To Find: Aritmatic return Geometric return Money weighted return

Q: Fiona purchased 200 shares of Oxygon stock for $11 a share on August 11, 2020. On July 28, 2021, the…

A: Answer:-  Capital gain meaning:- The profit earned on the sale of an asset for example, stock, bonds…

Q: Sophie purchased $100,000 of Stoudemire Corporation face value bonds for $86,000 on November 19,…

A: Sophie purchased $100000 face value for $86000, issued at a discount of $14000 it means sophie got…

Q: Owner, Juan invested an initial capital amounting P50,000 in order to put up his janitorial services…

A: Solution Given initial capital  50000  revenue During the first year of operations…

Q: Owner Pedro invested an initial capital of amounting P50,000 in order to put up his janitorial…

A: Capital means the amount invested by the owner in its business. Net income increases capital…

Q: Harrison Co. purchases 5,000 of the 50,000 outstanding ordinary shares of Taylor, Inc for £500,000…

A: Formula: Investment balance at year end = Beginning investment balance + net income - Dividends paid

Q: On January 1, 2020, Beyonce Co. purchased 25,000 shares (a 10% interest) in Elton John Corp. for…

A:

Q: Choose the correct. Panner, Inc., owns 30 percent of Watkins and applies the equity method. During…

A: Gross profit  = Sales - Cost = $90,000 - $54,000 = $36,000 Gross profit percentage = Gross profit /…

Q: Mary purchased 1,000 shares of Lucky Boots for $500 per share in 2010. Since then, Lucky Boots has…

A: Number of shares purchased = 1000 Price per share = $ 500 Value of investment = 500*1000 = $ 500,000…

Q: Kim Company bought 30% of the shares of Phelps, Inc., at the start of 2018. Kim paid $10 million for…

A: Equity method is a method of recording The investment is recorded at the acquisition cost under…

Q: The gain on sale of investment is

A: The method used for calculating value of investment would be equity method.       This is because…

Q: 1.Adams owns 80% of Williams and has a carrying value of the investment at January 1, 2020 of…

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

Q: On January 1, 2020, Adam gave Lou, her son, a 36-month certificate of deposit she had purchased on…

A: Certificate of Deposit: Certificate of Deposit refers to the certificate which is received from the…

Q: For what amount is worksheet entry “D” (Dr. Investment.  Cr. Dividends Paid) prepared for ?

A: Given information is: Big owns 70% of Little and uses the equity method to account for its…

Q: On February 4, 2017, Jonathon Cash bought 1,000 shares of Country Corporation stock for $6,800. On…

A: When a security is sold after a holding for a time of 12 months, any profit or loss on sale the…

Q: John bought 400 shares of Apple stock on January 1, 2015 for $200 per share with a brokerage fee of…

A: The wash sale rule is applied the stock is repurchased after sale of the same stock within 30 days.…

Q: On March 31, 2018, Chow Brothers, Inc., bought 10% of KT Manufacturing’s capital stock for $50…

A: Workings: Purchased 10 % of KT manufacturing's capital stock for $ 50 millions.

Q: Five years ago Gerald invested $198,000 in a passive activity, his sole investment venture. On…

A: As posted multiple sub parts we are answering only first three sub parts kindly repost the…

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.…

Q: there are no tax consequences for either individual in a given year, you should clearly state this…

A:

Q: dams Industries holds 40,000 shares of FedEx common stock, which is not a large enough ownership…

A: Given data: Adams holds 40000 shares of fedex common stock. Which is not a large enough ownership…

Q: Penny owns 501 shares of Mack Co. They have an adjusted cost base of $15.6 per share. On March 31,…

A: Adjusted cost bases is the basis in which all costs which are paid to acquire the shares are taken…

Q: Gaw Company owns 15% of the common stock of Trace Corporation and used the fair-value method to…

A: Under fair value method of recording investment, net income includes only dividend amount received.…

Q: Kim Company bought 30% of the shares of Phelps, Inc., at the start of 2021. Kim paid $10 million for…

A: Equity method is a method of recording The investment is recorded at the acquisition cost under…

Q: Alex purchased $5000 worth of shares in a small biotech company on 1 September 2019. At 31 December…

A: Ordinary or statutory income refers to the form of any type of income or basic income which is…

Q: On March 31, 2021, Chow Brothers, Inc., bought 10% of KT Manufacturing’s capital stock for $50…

A: A journal entry is used to record day-to-day transactions of the business by debiting and crediting…

Q: Simmons Corporation owns stock of Armstrong, Inc. Prior to 2020, the investment was accounted for…

A: The dividend revenue of $8,000 is obtained by multiplying the net income of $80,000 with the…

Q: kholders' equity on that date. On April 1, 2021, Lapwing sold 20% interest (one-fourth of its…

A: Compare the cash received to the item's carrying value to determine if you earned a profit or a loss…

Q: What is a Capital Asset?, Holding Period, and Calculation of Gain or Loss (LO 4.1, 4.2, 4.3) Martin…

A: Capital Asset for an individual taxpayer refers to certain assets which are purchased for investment…

Q: During 2021, Tom Sanchez purchased 200 shares of common stock issued by Tri State Manufacturing for…

A: Profit is referred as the financial benefit, which used to realize at the time of the generation of…

Q: On January 3, 2021 A Company purchases a 15 percent interest in B Corporation's common stock for…

A: Share in net income of 2021 = Net income x 15% = P20000 x 15% = P3000

Q: Five years ago, Gerald invested $122,000 in a passive activity, his sole investment venture. On…

A: Tax liability: It is the  tax debt  owe to tax authorities(Government)

Q: Dr. Hu owns 1,017 shares of EVKars Ltd. They have an ACB of $28 a share. On August 20,2020 she sells…

A:

Q: On 1st of January 2016, Ms. Huma purchased 2,400 shares of Bank Nizwa for OMR 0.700. The company…

A: This question deals with the total dividend paid  and value of share. Dividend is a distribution of…

Q: On January 1, 2020, Windsor Company purchased 6,100 shares of Kusher Company stock for $439,200.…

A: Revenue for 2020 (Net income x 30%) $ 136,800     Balance in investment account:…

Q: Prepare the Statement of Changes in Equity of Camray Traders for the year ended 28 February 2021…

A: Interest on Capital = Balance in Capital Account x Interest Rate x Period of Interest

Q: Big owns 70% of Little and uses the equity method to account for its investment in Little. In 2020,…

A: Big's Share in dividend reports by Little = Dividend x holding % = $300,000 x 70% = $210,000

Q: William accounts for its investment in Baker Company under the equity method. William carried the…

A: Ending investment value = Beginning investment Value + Rate of ownership ( Net income - Dividend…

Q: Carlo bought ABZ stock on 2016, for Php 250,000. On 2019, you sold all the stock for Php 285,000.…

A: Capital gain or loss is the profit or loss earned in the sale of stock

Q: Big owns 70% of Little and uses the equity method to account for its investment in Little. In 2020,…

A: In the given Problem, Big owns 70% of Little and uses the equity method to account for its…

Q: During 2019, Don Co. purchased 9,000 ordinary shares of Pia Co. for P16 per share, 6,000 ordinary…

A: The investment securities purchased by an organisation can be recorded as held for trading security,…

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.