Horngren's Financial & Managerial Accounting Plus Mylab Accounting With Pearson Etext -- Access Card Package (5th Edition) (miller-nobles Et Al., The Horngren Accounting Series)
5th Edition
ISBN: 9780134077345
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 10, Problem 10.14E
Accounting for stock investments
Suppose that on January 6, 2016, Westfall Motors paid $360,000,000 for its 40% investment in Phase Motors. Assume Phase earned net income of $20,000, 000 and paid cash dividends of $25,000,000 to all outstanding stockholders during 2016. (Assume all outstanding stock is voting stock.)
Requirements
1. What method should Westfall Motors use to account for the investment in Phase Motors? Give your reasoning.
2. Journalize all required 2016 transactions related to Westfall Motors's Phase investment. Include an explanation for each entry.
3. Post all 2016 transactions to the investment T-account. What is its balance after all the
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Requirement 1. Compute
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Company's earnings per share for
20182018.
Assume the company paid the minimum preferred dividend during
20182018.
Round to the nearest cent.
Select the formula, then enter the amounts to calculate the company's earnings per share for
20182018.
(Abbreviations used: Ave. = average, OS = outstanding, SE = stockholders' equity, shrs = shares.)
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Data Table
2018
2017
Income Statement—partial:
Net Income
$6,660
$20,000
Dec. 31, 2018
Dec. 31, 2017
Balance Sheet—partial:
Total Assets
$200,000
$265,000
Paid-In Capital:
Preferred Stock—9%, $6 Par Value;…
Question
(a) An investor purchased the share of Neptune
Corp on 1 Jan 2017 and held the investment
until
31 December 2021. Details of Neptune Corp's
share price and dividend payout during the
period of investment are as follows:
Date
Share Price
01 jan 2017
8.50
31 Dec 2017
8.80
31 Dec 2018
9.15
31 Dec 2019
9.22
31 Dec 2020
8.87
31 Dec 2021
9.12
Compute:
(i) Arithmetic rate of return for 2017, 2018, 2019,
2020 and 2021 separately.
(ii) Geometric average rate of return for the
entire period of investment from 2017 until
2021.
(iii) Logarithmic returns for the entire period of
investment from 2017 until 2021.
(b) Discuss four differences between investing
in stocks and investing in bonds.
Dividend
0.30
0.35
0.38
0.22
0.30
Requirements:
1. What is the amount debited to accumulated profits as a result of the declaration of the 10% stock dividend in item f?
2. What is the amount debited to accumulated profits as a result of the 2016 cash dividend declaration?
please answer the two questions with solution.
Chapter 10 Solutions
Horngren's Financial & Managerial Accounting Plus Mylab Accounting With Pearson Etext -- Access Card Package (5th Edition) (miller-nobles Et Al., The Horngren Accounting Series)
Ch. 10 - Prob. 1QCCh. 10 - Which of the following investments is most likely...Ch. 10 - If Intervale Railway invests 100,000 in 5% bonds...Ch. 10 - Prob. 4QCCh. 10 - Prob. 5QCCh. 10 - Prob. 6QCCh. 10 - Prob. 7QCCh. 10 - Harvard Co. purchased a trading investment on...Ch. 10 - Prob. 9QCCh. 10 - Prob. 10QC
Ch. 10 - What is a debt security?Ch. 10 - Prob. 2RQCh. 10 - Prob. 3RQCh. 10 - Briefly describe the five specific types of debt...Ch. 10 - How is the purchase of a held-to-maturity debt...Ch. 10 - Prob. 6RQCh. 10 - What method is used for investments in equity...Ch. 10 - What method is used for investments in equity...Ch. 10 - What adjustment must be made at the end of the...Ch. 10 - Where on the financial statements is an unrealized...Ch. 10 - Prob. 11RQCh. 10 - Prob. 12RQCh. 10 - Prob. 13RQCh. 10 - What does the rate of return on total assets...Ch. 10 - Identifying why companies invest and classifying...Ch. 10 - Prob. 10.2SECh. 10 - Prob. 10.3SECh. 10 - Accounting for equity method On January 1, 2016,...Ch. 10 - Accounting for trading investments On February 1,...Ch. 10 - Prob. 10.6SECh. 10 - Computing rate of return on total assets Kabra's...Ch. 10 - Prob. 10.8ECh. 10 - Prob. 10.9ECh. 10 - Accounting for bond investments Otter Creek Co....Ch. 10 - Accounting for stock investments Dollar Bill...Ch. 10 - Prob. 10.12ECh. 10 - Prob. 10.13ECh. 10 - Accounting for stock investments Suppose that on...Ch. 10 - Prob. 10.15ECh. 10 - Prob. 10.16ECh. 10 - A Accounting for bond investments Suppose Jenner...Ch. 10 - Prob. 10.18APCh. 10 - Accounting for stock investments The beginning...Ch. 10 - Accounting for bond investments Suppose Ritter...Ch. 10 - Classifying and accounting for stock investments...Ch. 10 - Accounting for stock investments The beginning...Ch. 10 - Prob. 10.23CPCh. 10 - Prob. 10.1CTEICh. 10 - Wild Adventure conducts tours of wildlife reserves...Ch. 10 - Prob. 10.1CTFSCCh. 10 - Prob. 10.1CTTPCh. 10 - In 150 words or fewer, explain the difference...
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