ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Textbook Question
Chapter 2, Problem 2.1.2E
Multiple-Choice Questions on Accounting for Equity Investments [AICPA Adapted]
Select the correct answer for each of the following questions.
2. In 20X0. Neil Company held the following investments in common stock:
• 25,000 shares of B&K Inc.’s 100,000 outstanding shares. Neil’s level of ownership gives it the ability to exercise significant influence over the financial and operating policies of B&K.
• 6,000 shares of Amal Corporation’s 309,000 outstanding shares.
During 20X0. Neil received the following distribution from its common stock investments:
![Chapter 2, Problem 2.1.2E, Multiple-Choice Questions on Accounting for Equity Investments [AICPA Adapted] Select the correct](http://dev-ingestion-image-output.s3-website-us-east-1.amazonaws.com/9781259916977/Chapter-2/images/html_16977-2-2.1.2e_image001.jpg)
What amount of dividend revenue should Neil report for 20X0?
a. $1,500
b. $4,200
c. $31,500
d. $34,200
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Carlin Enterprises purchased 2,000 shares of the 2,000,000 common shares outstanding in Captain Inc. Carlin intends to hold on to this investme
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Question 23
Held-to-maturity securities
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Date
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Debit
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May 3, 2020
Investment in GKKB Company
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Cash
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To record the acquisition of GKKB shares and its related transaction cost
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To record the acquisition of ABC shares, acquired at P32.45 per share
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Armadillo Enterprises acquired the following equity investmentsat the beginning of year 1 as trading investments.
Description
Number of shares
Market price per share
Total price
Finestra Company
15,000
x $25
$387,500
BVD Company
20,000
X$18
$360,000
Market values at theend of Years 1 &2 are presented
below:
Market/Fair Value
End of year 1
End of year 2
Finestra Company
$19
$23
BVD Company
|$22
$28
REQUIREMENTS:
Prepare the journal entry to record the acquisition of
theinvestments.
Prepare the adjusting journal entry required at the end of year1.
Armadillo Enterprises sells 15,000 shares of BVD Company for $16at the beginning of year 2. Prepare the journal entry to record thesale.
Prepare the adjusting journal entry required at the end of year2.
Assume that ArmadilloEnterprises now holds these investments asavailable-for-sale.
Prepare the journal entry to record the acquisition of theinvestments.
Prepare the adjusting journal entry required at the end of year1.
Armadillo Enterprises…
Chapter 2 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
Ch. 2 - What types of investments in common stock normally...Ch. 2 - Prob. 2.2QCh. 2 - Describe an investor’s treatment of an investment...Ch. 2 - How is the receipt of a dividend recorded under...Ch. 2 - How does carrying securities at fair value...Ch. 2 - Prob. 2.6QCh. 2 - Prob. 2.7QCh. 2 - Prob. 2.8QCh. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - How are a subsidiary’s dividend declarations...Ch. 2 - Prob. 2.12QCh. 2 - Give a definition of consolidated retained...Ch. 2 - Prob. 2.14QCh. 2 - Prob. 2.15QCh. 2 - Prob. 2.16AQCh. 2 - When is equity method reporting considered...Ch. 2 - How does the fully adjusted equity method differ...Ch. 2 - What is the modified equity method? When might a...Ch. 2 - Choice of Accounting Method Slanted Building...Ch. 2 - Prob. 2.2CCh. 2 - Prob. 2.3CCh. 2 - Prob. 2.4CCh. 2 - Prob. 2.5CCh. 2 - Prob. 2.6CCh. 2 - Prob. 2.1.1ECh. 2 - Multiple-Choice Questions on Accounting for Equity...Ch. 2 - Prob. 2.1.3ECh. 2 - Prob. 2.1.4ECh. 2 - Multiple-Choice Questions on Intercorporate...Ch. 2 - Prob. 2.2.2ECh. 2 - Prob. 2.3.1ECh. 2 - Prob. 2.3.2ECh. 2 - Prob. 2.3.3ECh. 2 - Prob. 2.4ECh. 2 - Acquisition Price Phillips Company bought 40...Ch. 2 - Prob. 2.6ECh. 2 - Prob. 2.7ECh. 2 - Carrying an investment at Fair Value versus Equity...Ch. 2 - Carrying an Investment at Fair Value versus Equity...Ch. 2 - Prob. 2.10ECh. 2 - Prob. 2.11ECh. 2 - Prob. 2.12ECh. 2 - Prob. 2.13ECh. 2 - Income Reporting Grandview Company purchased 40...Ch. 2 - Investee with Preferred Stock Outstanding Reden...Ch. 2 - Prob. 2.16AECh. 2 - Prob. 2.17AECh. 2 - Changes ¡n the Number of Shares Held Idle...Ch. 2 - Investments Carried at Fair Value and Equity...Ch. 2 - Carried at Fair Value Journal Entries Marlow...Ch. 2 - Consolidated Worksheet at End of the First Year of...Ch. 2 - Consolidated Worksheet at End of the Second Year...Ch. 2 - Prob. 2.23PCh. 2 - Prob. 2.24PCh. 2 - Prob. 2.25APCh. 2 - Equity-Method income Statement Wealthy...Ch. 2 - Prob. 2.27BPCh. 2 - Prob. 2.28BP
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