On January 2, 2021, Sanborn Tobacco Inc. bought 5% of Jackson Industry’s capital stock for $90 million. Jackson Industry’s net income for the year ended December 31, 2021, was $120 million. The fair value of the shares held by Sanborn was $98 million at December 31, 2021. During 2021, Jackson declared a dividend of $60 million.Required:1. Prepare all appropriate journal entries related to the investment during 2021.2. Assume that Sanborn sold the stock on January 2, 2022 for $110 million. Prepare the journal entry Sanborn would use to record the sale.

Q: On July 1, 2021, Tremen Corporation acquired 40% of the shares of Delany Company. Tremen paid…

A: The share and security acquired by the business entity are classified as assets. The ending balance…

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: 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: The following investment-related transactions were completed by LackyCorp. during 2020 - Purchased…

A: As per IFRS 9, Financial instruments, The financial asset classified as FVTOCI will be initially…

Q: At the beginning of 2019, Cookie Corporation had retained earnings of P 3,000,000. Throughout the…

A: Treasury stock: Shares which are bought back by the company from the open market but not retired…

Q: On January 4, 2021, Runyan Bakery paid $324 million for 10 million shares of Lavery Labeling Company…

A: 1) Journal entries:

Q: At the beginning of 2021, Gala company purchased equity securities to held for trading for…

A:

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 January 4, 2021, Runyan Bakery paid $340 million for 10 million shares of Lavery Labeling Company…

A: Investment accounts consist of the shares in which the company has invested its money and holds some…

Q: At the beginning of 2021, Gala company purchased equity securities to held for trading for…

A: It is pertinent to note that equity securities held for trading are measured at fair value through…

Q: On July 1, 2022, Denver Company purchased 30,000 shares of Eagle Company's 100,000 outstanding…

A: Lets understand the basics. When one entity purchase more than 20% of the share and less than 50% of…

Q: Jackson Inc. purchased 30,000 shares of common stock of the Pixel Corporation $10 per share on…

A: calculation of revenue from investment and investment shown in balance sheet are as follows

Q: Matthew, Inc., owns 30 percent of the outstanding stock of Lindman Company and has the ability to…

A: Part 1:

Q: Unit IV question 9

A: Journal entry - It refers to the process where the business transactions are recorded in the books…

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: 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: Fizer Pharmaceutical paid $68 million on January 2, 2021, for 4 million shares of Carne Cosmetics…

A: Equity investments is referred to the investment made by one company in the shares of another…

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

A: Lallo will report the net income from investment using the cost method.

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: Agee Corporation acquired a 35% interest in Trent Company on January 1, 2019, for $750,000. At that…

A: Stockholders’ equity: The claims of owners on a company’s resources, after the liabilities are paid…

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

A: Income from investment means dividend received by Lallo company paid by Vintar company.

Q: At the beginning of 2021, Gala company purchased equity securities to held for trading for…

A: The correct answer is given in the following steps for your reference

Q: At the beginning of 2021, Gala company purchased equity securities to held for trading for…

A: (Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

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 January 2, 2020, Black Company purchased 17% of Rock Company's common stock for $51,000. Rock's…

A: Investment means engaging the funds to generate income for the coming years. Investment can be made…

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: 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: At the beginning of 2019, TJH Corporation had retained earnings of P 3,000,000. Throughout the year,…

A: Solution: Retained earnings balance at Dec 31, 2019 = Beginning retained earnings + Net income -…

Q: On January 1, 2021, Pepita Corporation purchased 25% of the outstanding voting shares of Pablito…

A: These are the accounting transactions that are having a monetary impact on the financial statement…

Q: On January 3, 2019, Martin Company purchased for $500,000 cash a 10% interest in Renner Corp. The…

A: The journal entry here is passed up to December 31, 2019 related to R Corporation and for change…

Q: As a long-term investment at the beginning of the 2021 fiscal year, Florists International purchased…

A: Prepare the journal to record from the purchase to the end of the year. Working Notes:

Q: After all closing entries are made, Tremen's "Investment in Delany Company" account would have a…

A: Given information is: On July 1, 2019, Tremen Corporation acquired 40% of the shares of Delany…

Q: On January 2, 2020, Theodora Company purchased 40,000 shares of Byzantine, Inc. stock at P100 per…

A: Solution:Total cost of investment = Purchase cost + Brokerage fee - dividend= 40000*100 + 120000 -…

Q: On January 2, 2018, Sanborn Tobacco Inc. bought 5% of Jackson Industry’s capital stock for $90…

A:

Q: On December 15, 2021, Blue Company paid $100,000 for 8,0000 shares of Marble Company common stock.…

A: For the purpose of calculating investment by one company in another company the fair value of the…

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: Philip Company purchased 250,000 ordinary shares of Smiley Company for P40 per share on April 2,…

A: Given, Total Dividend paid=P600,000Total ordinary shares outstanding=1,000,000 ordinary shares

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, 2021, American Corporation purchased 30% of the outstanding voting shares of Short…

A: As per equity method of valuation, The total equity available is Fair value + Income - dividend…

Q: An investor company purchased 60,000 of the 500,000 outstanding shares of the investee company's…

A: Given the following information: An investor company purchased 60,000 of the 500,000 outstanding…

Q: Matthew, Inc., owns 30 percent of the outstanding stock of Lindman Company and has the ability to…

A: Equity represents the capital of the company that is reported on the balance sheet of the company.

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

A: Introduction:- On January 1, 2019, Lallo Company purchased 15% of Vintar Company's ordinary shares…

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: In the December 31, 2020, statement of financial position, what is the carrying amount of the…

A: correct option with all workings are as follows

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.