Business
AccountingFinancial AccountingOn January 4, 2016, Spandella Company purchased 175,000 shares of Filington Company directly from one of the founders for a price of $30 per share. Filington has 500,000 shares outstanding, including the Penman shares. On July 2, 2016, Filington paid $620,000 in total dividends to its shareholders. On December 31, 2016, Filington reported a net income of $1,050,000 for the year. Spandella uses the equity method in accounting for its investment in Filington. a. Provide the Spandella Inc. journal entries for the transactions involving its investment in Filington Inc. during 2016. b. Determine the December 31, 2016, balance of the Investment in Filington Company. Stock account.On January 4, 2016, Spandella Company purchased 175,000 shares of Filington Company directly from one of the founders for a price of $30 per share. Filington has 500,000 shares outstanding, including the Penman shares. On July 2, 2016, Filington paid $620,000 in total dividends to its shareholders. On December 31, 2016, Filington reported a net income of $1,050,000 for the year. Spandella uses the equity method in accounting for its investment in Filington. a. Provide the Spandella Inc. journal entries for the transactions involving its investment in Filington Inc. during 2016. b. Determine the December 31, 2016, balance of the Investment in Filington Company. Stock account.
BuyFindlaunch
Financial Accounting
14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781305088436
BuyFindlaunch
Financial Accounting
14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781305088436
Solutions
Chapter
Section
Chapter 15, Problem 11E
Textbook Problem
On January 4, 2016, Spandella Company purchased 175,000 shares of Filington Company directly from one of the founders for a price of $30 per share. Filington has 500,000 shares outstanding, including the Penman shares. On July 2, 2016, Filington paid $620,000 in total dividends to its shareholders. On December 31, 2016, Filington reported a net income of $1,050,000 for the year. Spandella uses the equity method in accounting for its investment in Filington.
- a. Provide the Spandella Inc. journal entries for the transactions involving its investment in Filington Inc. during 2016.
- b. Determine the December 31, 2016, balance of the Investment in Filington Company. Stock account.
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