Pam Corporation paid $190,000 for 40 percent of Sun Corporation's outstanding voting common stock on July 1, 2016. Sun's stockholders' equity on January 1, 2016, was $250,000, consisting of $150,000 capital stock and $100,000 retained earnings. During 2016, Sun reported net income of $50,000, and on November 1, 2016, Sun declared dividends of $25,000. Sun's assets and liabilities were stated at fair values on July 1, 2016, except for land that was undervalued by S15,000 and equipment with a five-year remaining useful life that was undervalued by $25,000. REQUIRED: Prepare all the journal entries (other than closing entries) on the books of Pam Corporation during 2016 to account for the investment in Sun.

Pam Corporation paid $190,000 for 40 percent of Sun Corporation's outstanding voting common stock on July 1, 2016. Sun's stockholders' equity on January 1, 2016, was $250,000, consisting of $150,000 capital stock and $100,000 retained earnings. During 2016, Sun reported net income of $50,000, and on November 1, 2016, Sun declared dividends of $25,000. Sun's assets and liabilities were stated at fair values on July 1, 2016, except for land that was undervalued by S15,000 and equipment with a five-year remaining useful life that was undervalued by $25,000. REQUIRED: Prepare all the journal entries (other than closing entries) on the books of Pam Corporation during 2016 to account for the investment in Sun.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter1: Introduction To Business Activities And Overview Of Financial Statements And The Reporting Process

Section: Chapter Questions

Problem 30E

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Company R pays $170,000 for a 30% interest in Company E on January 1, 2015. Company E’s total stockholders’ equity on that date is $500,000. The excess price is attributed to equipment with a 5-year life. During 2015, Company E reports net income of $35,000 and pays total dividends of $10,000. Answer the following questions assuming the investment is recorded under the equity method: a. What is Company R’s investment income for 2015? b. What is Company R’s investment balance on December 31, 2015? c. Explain, in words, the investment balance on December 31, 2015.
P 2-2 Journal entries for midyear investment (cost and equity methods) Pam Company paid $440,000 for an 80 percent interest in Sun Company on July 1, 2016, when Sun had total equity of $220,000. Sun Company reported earnings of $20,000 for 2016 and declared dividends of $32,000 on November 1, 2016. Required Give the entries to record these facts on the books of Pam Company: Assuming that Pam Company uses the cost method of accounting for its subsidiaries. Assuming that Pam Company uses the equity method of accounting for its subsidiaries. (Any difference between investment cost and book value acquired is to be assigned to equipment and amortized over a 10-year period.)
Thetrial balances of Parker and Sargent companies of Exercise 3 for December 31, 2016, are presented as follows: Parker SargentCurrent Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102,000 115,000Depreciable Fixed Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,000 200,000Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (130,000) (40,000)Investment in Sargent Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320,000Current Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (80,000)Common Stock ($10 par) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (300,000)(100,000) Retained Earnings, January 1, 2016. . . . . . . . . . . . . . . . .…
Zoo Company began operations on January 1, 2024 with a P1,500,000 from the issuance of shares and borrowed funds of P500,000. P300,000 worth of equipment was acquired out of the initial investment. At the end of the accounting year, the company reported a net income of P400,000, and Zoo declared a P100,000 cash dividend on December 19, 2024. No additional transactions affected the owner’s equity in2024. On December 31, 2024, liabilities of the company had increased to P700,000. InZoo’s December 31, 2024 statement of financial position, how much should be reported as its total assets?
On January 1, 2013, K Company purchased a 30 % interest in P Company for $250,000. P reported net income of $100,000 for 2013 and declared and paid a dividend $10,000. K accounts for investment using the equity method. In December 31, 2013,balance sheet, what amount should K report as its investment in P? Select one: a. 277,000 b. 223,000 c. 160,000 d. 340,000
Company E reports net income of $100,000 for 2015. Assume the income is earned evenly throughout the year. Dividends of $10,000 are paid on December 31. What will Company R report as investment income under the following ownership situations, if: a. Company R owns a 10% interest from July 1 to December 31? b. Company R owns a 10% interest from January 1 to June 30 and a 25% interest from July 1 to December 31? c. Company R owns a 30% interest from January 1 to June 30 and a 10% interest from July 1 to December 31?
ASAP!! The following income statement and selected balance sheet account data are available for Satelllite Transmissions, Inc,. at December 31: SATELLITE TRANSMISSIONS, INC Income Statement For the Year Ended December 31,2012 Net Income 205,000 Gain on sales of marketable securities 4000 Depreciation expense 26000 Loss on sale of plant assets 12500 Gain on sale of securities 6500 Selected account balances: End of Year Beg.…
E 2-3 Calculate percentage ownership and goodwill on investment acquired directly from investee Son Corporation’s stockholders’ equity at December 31, 2015, consisted of the following (in thousands): Capital stock, $10 par, 60,000 shares issued and outstanding $600 Additional paid-in capital 150 Retained earnings 250 Total stockholders’ equity $1,000 On January 1, 2016, Pop Corporation purchased 20,000 previously unissued shares of Son stock directly from Son Corporation for $500,000. Required Calculate Pop Corporation’s percentage ownership in Son. Determine the goodwill (if any) from Pop’s investment in Son. Assume book values of all identifiable assets and liabilities equal the fair values.
Answer both subparts.if answered within 30mins,it would be helpful!! Accounting During 2018, Bar Build Company constructed various assets at a total cost of £16,800,000. The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2018 were £11,200,000. The company had the following debt outstanding at December 31, 2018:1. 10%, 5-year note to finance construction of various assets,dated January 1, 2018, with interest payable annually on January 1 £7,200,0002. 12%, ten-year bonds issued at par on December 31, 2013, with interestpayable annually on December 31 8,000,0003. 9%, 3-year note payable, dated January 1, 2017, with interest payableannually on January 1 4,000,000InstructionsCompute the amounts of each of the following (show computations).1. Avoidable interest.2. Total interest to be capitalized during 2018.
5. Use the following information for the next three (3) questions: On July 1, 2021 Captain Universe Company declared as property dividends 10,000 shares held as investment in associate with carrying amount of P4,000,000. Cost of disposal is immaterial. Information on fair values is shown below: Date Fair Value July 1, 2021 P3,200,000 December 31, 2021 4,400,000 February 1, 2022 3,800,000 Questions: The entries on July 1, 2021 include all of the following except Group of answer choices A debit to retained earnings for P3,200,000 A debit to impairment loss for P800,000 A debit to non current asset held for disposal to owners for P4,000,000 A credit to property dividends payable for P3,200,000
P 3-5 Prepare a consolidated balance sheet one year after acquisitionAdjusted trial balances for Pop and Son Corporations at December 31, 2016, are as follows (in thousands): Pop Son Debits Current assets $ 1,920 $ 800 Plant assets—net 4,000 2,400 Investment in Son 3,360 ----- Cost of sales 2,400 2,400 Other expenses 800 400 Dividends 400 ---- $12,880 $6,000 Credits Liabilities $ 3,600 $ 1,680 Capital stock 2,400 400 Retained earnings 2,720 720 Sales 4,000 3,200 Income from Son 160 ---- $12,880 $6,000 Pop purchased all the stock of Son for $3,200,000 cash on January 1, 2016, when Son’s stockholders’ equity consisted of $400,000 capital stock and $720,000 retained earnings. Son’s assets and liabilities…
P 2-3 Computations for investee when excess allocated to inventories, building, and goodwill Pop Company acquired a 30 percent interest in the voting stock of Son Company for $331,000 on January 1, 2016, when Son’s stockholders’ equity consisted of capital stock of $600,000 and retained earnings of $400,000. At the time of Pop’s investment, Son’s assets and liabilities were recorded at fair values, except for inventories that were undervalued by $30,000 and a building with a 10-year remaining useful life that was overvalued by $60,000. Son has income for 2016 of $100,000 and pays dividends of $50,000. Assume undervalued inventories are sold in 2016. Required Compute Pop’s income from Son for 2016. What is the balance of Pop’s Investment in Son account at December 31, 2016? What is Pop’s share of Son’s recorded net assets at December 31, 2016?