Novak Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,214,400 for 52,800 shares. Kulikowski Inc. declared and paid an $0.80 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $768,000 for 2021. The fair value of Kulikowski’s stock was $26 per share at December 31, 2021. Assume that the security is a trading security. 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: Bramble Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31,…

A: ASC 323-10 provides guidance for accounting of income and dividends received from investees in case…

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: 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:

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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…

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

A: Solution-  Journal entries for Sarasota inc for 2020 and 2021 Assuming that Sarasota can not…

Q: Kingbird Corporation acquired a 38% interest in Blue Company on January 1, 2021, for $480,000. At…

A: Balance of equity investment = Cost of purchase + Share of net income - Share of dividend

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

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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: Waterway Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December…

A: Cash dividend=Number of shares×Per share dividend=46,800×$0.90=$42,120

Q: Jaycie Phelps Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on…

A: A journal entry refers to the act of making/keeping records of monetary events occurring in a…

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.

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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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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, 2020. Mickey Mouse Corporation owns 15,000 ordinary shares representing 15% of the…

A: Answer: Jan 1 2020: 15000 shares with cost of P1,400,000 Dec 31,2020: 15000 shares with fair market…

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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 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…

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

A: Investment at fair value = no. of shares x  fair value per share = 49,800 shares x $29 per share =…

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: Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2020, by issuing…

A: A business combination is a transaction in which a buyer takes over control of another company (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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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,…

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.