On January 1, 2024, Alamar Corporation acquired a 40 percent interest in Burks, Incorporated, for $210,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $360,000. During 2024, Burks reported net income of $80,000 and declared and paid cash dividends of $25,000. Alamar sold inventory costing $30,000 to Burks during 2024 for $40,000. Burks used all of this merchandise in its operations during 2024. Required: Prepare all of Alamar's 2024 journal entries to apply the equity method to this investment. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet < 1 2 Transaction e 3 Note: Enter debits before credits. Record the income on intra-entity sale. 4 5 General Journal Investment in Burks, Incorporated Equity in investee income. Debit 4,000 Credit 4,000 >

On January 1, 2024, Alamar Corporation acquired a 40 percent interest in Burks, Incorporated, for $210,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $360,000. During 2024, Burks reported net income of $80,000 and declared and paid cash dividends of $25,000. Alamar sold inventory costing $30,000 to Burks during 2024 for $40,000. Burks used all of this merchandise in its operations during 2024. Required: Prepare all of Alamar's 2024 journal entries to apply the equity method to this investment. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet < 1 2 Transaction e 3 Note: Enter debits before credits. Record the income on intra-entity sale. 4 5 General Journal Investment in Burks, Incorporated Equity in investee income. Debit 4,000 Credit 4,000 >

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 25E

See similar textbooks

Similar questions

On January 1, 2024, Alamar Corporation acquired a 35 percent interest in Burks, Incorporated, for $235,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $347,000. During 2024, Burks reported net income of $79,000 and declared and paid cash dividends of $24,000. Alamar sold inventory costing $22,000 to Burks during 2024 for $44,000. Burks used all of this merchandise in its operations during 2024. Required: Prepare all of Alamar's 2024 journal entries to apply the equity method to this investment. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet < 1 2 3 Note: Enter debits before credits. 4 Record the investee dividend declaration. Transaction с 5 General Journal Debit Credit
On January 1, 2024, Alamar Corporation acquired a 40 percent interest in Burks, Incorporated, for $210,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $360,000. During 2024, Burks reported net income of $80,000 and declared and paid cash dividends of $25,000. Alamar sold inventory costing $30,000 to Burks during 2024 for $40,000. Burks used all of this merchandise in its operations during 2024. Required: Prepare all of Alamar's 2024 journal entries to apply the equity method to this investment. Record the acquisition of a 40 percent interest in Burks. Record the accrual of 40 percent of the reported earnings of the investee. Record the investee dividend declaration Record the collection of dividend from investee. Record the income on intra-entity sale.
On January 1, 2018, Alamar Corporation acquired a 42 percent interest in Burks, Inc., for $185,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $337,000. During 2018, Burks reported net income of $84,000 and declared and paid cash dividends of $24,000. Alamar sold inventory costing $29,000 to Burks during 2018 for $41,000. Burks used all of this merchandise in its operations during 2018. Prepare all of Alamar's 2018 journal entries to apply the equity method to this investment....... For this example what/how do you determine the Dividend Recievable amount?
On January 1, 2024, Spark Corporation acquired a 40% interest in Cranston Incorporated for $250,000. On that date, Cranston's balance sheet disclosed net assets of $430,000. During 2024, Cranston reported net income of $100,000 and paid cash dividends of $30,000. Spark sold inventory costing $40,000 to Cranston during 2024 for $50,000. Cranston used all of this merchandise in its operations during 2024. Any excess cost over fair value is attributable to an unamortized trademark with a 20-year remaining life. Prepare all of Spark's journal entries for 2024 to apply the equity method to this investment.
On January 1, 2021, Alamar Corporation acquired a 42 percent interest in Burks, Inc., for $185,000. On that date, Burks’s balance sheet disclosed net assets with both a fair and book value of $337,000. During 2021, Burks reported net income of $84,000 and declared and paid cash dividends of $24,000. Alamar sold inventory costing $29,000 to Burks during 2021 for $41,000. Burks used all of this merchandise in its operations during 2021. Prepare all of Alamar’s 2021 journal entries to apply the equity method to this investment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
On January 1, 2021, Alamar Corporation acquired a 36 percent interest in Burks, Inc., for $218,000. On that date, Burks’s balance sheet disclosed net assets with both a fair and book value of $349,000. During 2021, Burks reported net income of $76,000 and declared and paid cash dividends of $25,000. Alamar sold inventory costing $25,000 to Burks during 2021 for $36,000. Burks used all of this merchandise in its operations during 2021. Prepare all of Alamar’s 2021 journal entries to apply the equity method to this investment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. Record the acquisition of a 36 percent interest in Burks. 1b. Record the 36 percent income earned by Alamar from this investment. 1c. Record the investee dividend declaration. 1d. Record the collection of dividend from investee.
On January 1, 2021, Alamar Corporation acquired a 36 percent interest in Burks, Inc., for $198,000. On that date, Burks’s balance sheet disclosed net assets with both a fair and book value of $353,000. During 2021, Burks reported net income of $84,000 and declared and paid cash dividends of $24,000. Alamar sold inventory costing $27,000 to Burks during 2021 for $35,000. Burks used all of this merchandise in its operations during 2021. Prepare all of Alamar’s 2021 journal entries to apply the equity method to this investment 2. Record the 36 percent income earned by Alamar from this investment.
On January 1, 2021, Alamar Corporation acquired a 36 percent interest in Burks, Inc., for $198,000. On that date, Burks’s balance sheet disclosed net assets with both a fair and book value of $353,000. During 2021, Burks reported net income of $84,000 and declared and paid cash dividends of $24,000. Alamar sold inventory costing $27,000 to Burks during 2021 for $35,000. Burks used all of this merchandise in its operations during 2021. Prepare all of Alamar’s 2021 journal entries to apply the equity method to this investment. 3. Record the investee dividend declaration.
On January 1, 2021, Alamar Corporation acquired a 36 percent interest in Burks, Inc., for $198,000. On that date, Burks’s balance sheet disclosed net assets with both a fair and book value of $353,000. During 2021, Burks reported net income of $84,000 and declared and paid cash dividends of $24,000. Alamar sold inventory costing $27,000 to Burks during 2021 for $35,000. Burks used all of this merchandise in its operations during 2021. Prepare all of Alamar’s 2021 journal entries to apply the equity method to this investment. 4. Record the collection of dividend from investee.
On January 1, 2021, Alamar Corporation acquired a 36 percent interest in Burks, Inc., for $198,000. On that date, Burks’s balance sheet disclosed net assets with both a fair and book value of $353,000. During 2021, Burks reported net income of $84,000 and declared and paid cash dividends of $24,000. Alamar sold inventory costing $27,000 to Burks during 2021 for $35,000. Burks used all of this merchandise in its operations during 2021. Prepare all of Alamar’s 2021 journal entries to apply the equity method to this investment 1. Record the acquisition of a 36 percent interest in Burks
On January 1, 2018, Alamar Corporation acquired a 40 percent interest in Burks, Inc., for $210,000. On that date, Burks’s balance sheet disclosed net assets with both a fair and book value of $360,000. During 2018, Burks reported net income of $80,000 and declared and paid cash dividends of $25,000. Alamar sold inventory costing $30,000 to Burks during 2018 for $40,000. Burks used all of this merchandise in its operations during 2018. Prepare all of Alamar’s 2018 journal entries to apply the equity method to this investment.
On January 1, 2018, Spark Corp. acquired a 40% interest in Cranston Inc. for $250,000. On that date, Cranston’s balance sheet disclosed net assets of $430,000. During 2018, Cranston reported net income of $100,000 and paid cash dividends of $30,000. Spark sold inventory costing $40,000 to Cranston during 2018 for $50,000. Cranston used all of this merchandise in its operations during 2018. Any excess cost over fair value is attributable to an unamortized trademark with a 20-year remaining life. Prepare all of spark's journal entries for 2018 to apply the equity method to this investment. This is what I have so Far: To record initial investment: Dr Equity Investment 250,000 Cr Cash 250,000 To record investee income: Dr Equity Investment 40, 000 Cr Equty Income To record Dividends Dr Cash 12, 000 Cr Equity Investment 12,000 How do I show the inventory when it is sold?