On January 2, 2018, Sanborn Tobacco Inc. bought 5% of Jackson Industry’s capital stock for $90 million. JacksonIndustry’s net income for the year ended December 31, 2018, was $120 million. The fair value of the shares heldby Sanborn was $98 million at December 31, 2018. During 2018, Jackson declared a dividend of $60 million.Required:1. Prepare all appropriate journal entries related to the investment during 2018.2. Assume that Sanborn sold the stock on January 2, 2019 for $110 million. Prepare the journal entry Sanbornwould use to record the sale

Q: On January 1, 2018, West Coast Boats paid $ 1,850,000 for its 30% investment in East Coast Autos.…

A: Given that: Investments price = $18,50,000 Net Income = $30,000,000 Dividends paid = $15,000,000

Q: On June 30, 2021, ABC Company acquired 50,000 representing 25% ownership interest in Arthur…

A: Investment is the asset or security bought to earn returns from the same in future.

Q: Fizer Pharmaceutical paid $86 million on January 2, 2021, for 6 million shares of Carne Cosmetics…

A: A Journal entry is a primary entry that records the financial transactions initially. The…

Q: An investor company purchased 42,000 of the 100,000 outstanding shares of the investee company's…

A: Equity method is a method of accounting for investments. This method is used when investor has…

Q: On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000.…

A: SOLUTION- EXPLANATION- NET PROFIT IN 2019 = 300000 INCREASE IN INVESTMENT = 300000 *25%…

Q: On July 1, 2021, JKJ Corporation purchased 100 common shares of JMK Ltd. at $20 per share. JKJ…

A: Solution: As shares are expected to be sold with in a year, therefore investment should be…

Q: On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000.…

A: The investment in shares gets increased by profits and decreased by dividend received.

Q: During the year ended December 31, 2019, and in the following montha of January and February 2020,…

A: The FV- fair Value of Securities is considered as the current value at which the security is trading…

Q: On January 1, 2018, ABC Company purchased 40,000 shares of RST at P100 per share. The investment in…

A: Measurements of Investment-: In addition to common deviation, a bond's or bond fund's risk is…

Q: Agustin Company has the following transactions relating to its investments during 2022. January 5 -…

A: Introduction:- The following basic information as follows under:- Shares held-for-trading means…

Q: According to the statements, prepare the appropriate journal entries, and calculate the differences…

A: Balance sheet shows the financial position of the entity by presenting its assets and liabilities so…

Q: On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At…

A: Given :- Cost of acquisition = P1,000,000. Percentage of share acquired = 25%. Net income for 2018 =…

Q: On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000.…

A: Amount of profit in 2018 P1,60,000   Share of Profit (P160000 * 25%) P40,000         Account…

Q: On December 31, 2014, how much should MARIE CORP. carry its investment in CURIE INC.?

A: In case of equity method, the purchase value of investment would be adjusted for share in equity for…

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: Fizer Pharmaceutical paid $68 million on January 2, 2018, for 4 million shares of Carne Cosmetics…

A:

Q: Tulip Corp. purchased 300,000 shares of common stock in Sherman Co. for $50 per share on January 2,…

A: Income statement is the financial statement which is prepared to show the profitability of an…

Q: Agee Corporation acquired a 30% interest in Trent Company on January 1, 2018 for $490,000. At that…

A: In accordance with IAS 28 "If an entity holds 20% or more of the voting power (directly or through…

Q: On January 2, 2016, Sanborn Tobacco, Inc., bought 5% of Jackson Industry’s capital stock for $90…

A: 1.investment be classified under trading securities in the sanborn balance sheet.2.

Q: MD Corp. completed the following transactions relating to investment in AO Company ordinary shares,…

A: Where shares are held as investments for short-term (current assets), the shares are recorded at…

Q: On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At…

A: When one company is holding shares in another company which is less than  50% , then it is called as…

Q: On July 1, 2018, Tremen Corporation acquired 40% of the shares of Delany Company. Tremen paid…

A: Investment is the amount which is put into some assets or securities to gain some returns in future.…

Q: On January 1, 2019, Lallo Company purchased 15% of Vintar Company's ordinary shares for P20,000,000.…

A: Formula: Income from the investment = Total dividends paid x Percentage of holding shares

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: On January 4, 2016, Runyan Bakery paid $324 million for 10 million shares of Lavery Labeling Company…

A: 1.Prepare all appropriate journal entries related to the investment during 2016, assuming Runyan…

Q: In 2018, Lakers Corporation acquired 3,000 shares of its P 20 par value ordinary share capital at…

A: Treasury shares are those shares which are being reacquired or repurchased by the company from its…

Q: An investor company purchased 121,000 of the 250,000 outstanding shares of the investee company's…

A: Owners’ equity: It is a owner's value and amount invested by an individual in the firm. It is…

Q: On January 2, 2021, Sanborn Tobacco Inc. bought 5% of Jackson Industry’s capital stock for $90…

A: 1.

Q: On October 1, 2021, Taehyung Company acquired 40,000 ordinary shares for $880,000 at to be held for…

A: As per IFRS 9, Financial instruments, The financial assets measured at fair value through profit and…

Q: On January 1, 2023, Evans Company purchased 40% of Farley Corporation’s 800,000 outstanding shares…

A: Journal entries: Journal entries are recognized in the journal book for showing the transactions as…

Q: On January 1, 2021, Ildiko Corporation purchased a 35% interest in the common shares of Rance Ltd.…

A: In case of equity method of accounting for Investment then Investment income will be assessee share…

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: Agee Corporation acquired a 30% interest in Trent Company on January 1, 2018 for $490,000. At that…

A: Shareholder's equity are also called as Stockholder's equity and it is the remaining amount the…

Q: On May 1, 2020, Cheng Company, a public company, acquired 176,000 of the 550,000 outstanding common…

A: Percentage of  stake acquired  = 176000/550,000 = 0.32 (OR) 32% Here the investor has significant…

Q: On October 15, 2020, the Liza Company received a liquidating dividend of P100,000 from Edward…

A: Equity method of accounting is followed when the holding company has a significant influence in…

Q: Prepare journal entries to record the transactions assuming:  a.) The securities are classified as…

A: Journal entry: Journal entry is the book of original entry where first transactions are recorded in…

Q: On July 1, 2018 Tam Company purchased 3,000 shares of Del Company capital stock as a temporary…

A:

Q: On 1 January 2017, Al Yousef Group acquired 30% of the outstanding voting shares of Saleh…

A: Accounting Rules (1) Debit what comes in, Credit what goes out.(2) Debit all expenses and losses,…

Q: On January 1, 2011, Goodwill Corporation purchased 25% of the outstanding voting shares of Short…

A: We first need to understand the meaning of equity method for recording investment. This method is…

Q: On January 4, 2018, Runyan Bakery paid $324 million for 10 million shares of Lavery Labeling…

A: 1. Prepare all appropriate journal entries related to the investment during 2016, assuming Runyan…

Q: On 1 January 2017, Al Yousef Group acquired 30% of the outstanding voting shares of Saleh…

A: Solution: Share in Saleh's dividend in 2017 = Total dividend paid * % holding of AI = OMR 40,000 *…

Q: Bloom Company was incorporated on January 1, 2018, with P500,000 from the issuance if share capital…

A: Balance sheet means where all assets , liabilities and equity are shown in proper format In balance…

Q: On 1 January 2017, Al Yousef Group acquired 30% of the outstanding voting shares of Saleh…

A: Yousef Group acquired 30% of the outstanding voting shares of Saleh Enterprises & investment…

Q: On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000.…

A: The investment in shares of another company (assets) gets increased with profits and and decrease…

Q: According to the statements, prepare the appropriate journal entries, and calculate the differences…

A: 1) Date General Journal Debit Credit Jan 1 FV- OCI Investment  $900,000     Cash   $900,000…

Q: On January 1, 2021, Point, Inc. purchased 10% of lona Co.'s common stock. Point purchased additional…

A: Answer -   The amount of investment income to be reported in the year 1 income statement - When an…

Q: On January 4, 2021, Runyan Bakery paid $360 million for 10 million shares of Lavery Labeling Company…

A: The equity method is a bookkeeping procedure utilized by an organization to record the benefits…

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.