ADVANCED ACCOUNTING
13th Edition
ISBN: 9781260773033
Author: Hoyle
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 6, Problem 21P
On January 1, 2018, Stamford issues 10,000 additional shares of common stock for $15 per share. Neill does not acquire any of this newly issued stock. How does this transaction affect the parent company’s Additional Paid-In Capital account?
- a. Has no effect on it.
- b. Increases it by $44,000.
- c. Decreases it by $35,200.
- d. Decreases it by $55,000.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
In 2019, Gerry , Inc. issued $1 par common stock for $35 per share. No other common stock transactions occurred until July 31, 2021, when Winn acquired some of the issued shares for $30 per share and retired them. Which of the following statements correctly states an effect of this acquisition and retirement?
A. 2021 net income is decreased.
B. Additional paid-in capital is decreased.
C. 2021 net income is increased.
D. Retained earnings is increased.
Required information
These questions are based on the following information and should be viewed as independent situations.
Popper Co. acquired 80% of the common stock of Cocker Co. on January 1, 2016, when Cocker had the following
stockholders' equity accounts.
Common stock - 40,000 shares outstanding
Additional paid-in capital
Retained earnings
Total stockholders' equity
$
$
140,000
105,000
476,000
721,000
To acquire this interest in Cocker, Popper paid a total of $682,000 with any excess acquisition date fair value over
book value being allocated to goodwill, which has been measured for impairment annually and has not been
determined to be impaired as of January 1, 2019. Popper did not pay any premium when it acquired its original interest
in Cocker. On January 1, 2019, Cocker reported a net book value of $1,113,000 before the following transactions were
conducted. Popper uses the equity method to account for its investment in Cocker, thereby reflecting the change in
book value of…
Turner Company owns 15% of the outstanding stock of ICA Company. During the current year, ICA paid a $5.30 million cash dividend
on its common shares.
What effect did this dividend have on Turner's 2021 financial statements? (Enter your answers in whole dollars, not in millions.
Amounts to be deducted should be indicated with a minus sign. If there is no effect to an element of the financials statements,
select "No effect.)
Answer is complete but not entirely correct.
Balance sheet
Cash
795,000
Retained earnings
795,000
Income statement
Dividend revenue
795,000
Chapter 6 Solutions
ADVANCED ACCOUNTING
Ch. 6 - Prob. 1QCh. 6 - Prob. 2QCh. 6 - When is a firm required to consolidate the...Ch. 6 - Prob. 4QCh. 6 - Prob. 5QCh. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - Prob. 8QCh. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - Prob. 11QCh. 6 - How do noncontrolling interest balances affect the...Ch. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - Prob. 17QCh. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Problems 7 and 8 are based on the following...Ch. 6 - Prob. 8PCh. 6 - Bens man Corporation is computing EPS. One of its...Ch. 6 - Prob. 10PCh. 6 - Prob. 11PCh. 6 - Prob. 12PCh. 6 - Prob. 13PCh. 6 - Prob. 14PCh. 6 - Prob. 15PCh. 6 - Prob. 16PCh. 6 - On January 1, Coldwater Company has a net book...Ch. 6 - Prob. 18PCh. 6 - Prob. 19PCh. 6 - Prob. 20PCh. 6 - On January 1, 2018, Stamford issues 10,000...Ch. 6 - On January 1, 2018, Stamford reacquires 8,000 of...Ch. 6 - Prob. 23PCh. 6 - Prob. 24PCh. 6 - On December 31, 2017. PanTech Company invests...Ch. 6 - Prob. 26PCh. 6 - Prob. 27PCh. 6 - Prob. 28PCh. 6 - Prob. 29PCh. 6 - Prob. 30PCh. 6 - Prob. 31PCh. 6 - Prob. 32PCh. 6 - Prob. 33PCh. 6 - Prob. 34PCh. 6 - Prob. 35PCh. 6 - Alford Company and its 80 percentowned subsidiary,...Ch. 6 - Prob. 37PCh. 6 - Prob. 38PCh. 6 - Prob. 39PCh. 6 - Prob. 40PCh. 6 - Prob. 41PCh. 6 - Prob. 42PCh. 6 - Prob. 43PCh. 6 - Prob. 44PCh. 6 - Fred, Inc., and Herman Corporation formed a...Ch. 6 - Prob. 46PCh. 6 - Prob. 47PCh. 6 - Prob. 48PCh. 6 - Prob. 49PCh. 6 - Prob. 50PCh. 6 - Prob. 1DYSCh. 6 - Prob. 2DYSCh. 6 - The FASB ASC Subtopic Variable Interest Entities...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Arcola, Inc., acquires all 40,000 shares of Tuscola Company for $725,000. A year later, when Arcola’s equity adjusted balance in its investment in Tuscola equals $800,000, Tuscola issues an additional 10,000 shares to outside investors for $25 per share. Which of the following best describes the effect of Tuscola’s stock issue on Arcola’s investment account?a. No effect because the shares were all sold to outside parties.b. The investment account is reduced because Arcola now owns a smaller percentage of Tuscola.c. The investment account is increased because Arcola’s share of Tuscola’s value has increased.d. No effect because Arcola maintains control over Tuscola despite the new stock issue.arrow_forwardOn March 1, 2018, Rawlins Company invests $25,000 in Ashton Company stock. Ashton pays Rawlins a $800 dividend on September 30, 2018. Rawlins sells the Ashton stock on November 30, 2018 for $23,500. Assume the investment is categorized as a short-term equity investment and that Rawlins does not have significant influence over Ashton. Requirements: 1. Journalize the transactions for Rawlins' investment in Ashton's stock.arrow_forwardOn March 1, 2024, Garden Company invests $13,000 in Firs, Inc. stock. Firs pays Garden a $200 dividend on August 1, 2024. Garden sells the Firs' stock on August 31, 2024, for $13,350. Assume the investment is categorized as a short-term equity investment and Garden Company does not have significant influence over Firs, Inc 1. Journalize the transactions for Garden's investment in Firs' stock. 2. What was the net effect of the investment on Garden's net income for the year ended December 31, 2024arrow_forward
- On January 1, 2019, Mulcahy Manufacturing Inc., a newly formed corporation, issued 1,000shares of common stock in exchange for $150,000 cash. No other shares were issued during2019, and no shares were repurchased by the corporation. On November 1, 2019, the corporation’smajor stockholder sold 300 shares to another stockholder for $50,000. The corporationreported net income of $37,500 for 2019.Required:Prepare the stockholders’ equity section of Mulcahy’s balance sheet at December 31, 2019.arrow_forwardHardstone Inc. had excess cash and invested it in the stock of Softrock, Inc. On August 5, 2021 Hardstone bought 7,000 shares of Softrock at $12 per share. On September 30, 2021, Softrock paid a cash dividend of $1 per share. On December 31, 2021, the stock had decreased in value to $10 per share. Which of the following would be included in the journal entry for December 31, 2021? No entry required Debit to Trading Securities: $14,000 Debit to Unrealized Loss on Investments: $14,000 Credit to Cash: $7,000 Credit to Dividend Revenue: $7,000arrow_forwardTurner Company owns 10% of the outstanding stock of ICA Company. During the current year, ICA paid a $5 million cash dividend on its common shares. Ignore income taxes. What effect did this dividend have on Turner's 2024 financial statements? Note: Enter your answers in whole dollars, not in millions. If there is no effect to an element of the financial statements, select "No effect".arrow_forward
- On January 4, 2021, Snow Co. purchased 40,000 shares (40%) of the common stock of Walker Corp., paying $900,000. There was no goodwill or other cost allocation associated with the investment. Snow has significant influence over Walker. During 2021. Walker reported income of $240,000 and paid dividends of $75,000. On January 2, 2022, Snow sold 5,000 shares for $125,000. What was the balance in the investment account after the shares had been sold? Multiple Choice $871,500. $845,250. $761,250. $897,250. MacBook Air 888 DII Fア F10 F11 F2 F3 F4 23 $ & 3 4 5 8 { W E R Y U P F G J K く C V command option .. .- この * 00 B トarrow_forwardEarnestine, Kepplinger & Co. began a new public corporation. The corporation’s common shares have no par value. During the first month of operations, it had the following share transactions. a) Earnestine, Kepplinger & Co. issued 12,700 common shares for $98,000 on November 1, 2020. Write the journal entry to record the transaction. Do not enter dollar signs or commas in the input boxes.For transactions that have 2 debits or credits, enter the accounts in alphabetical order. Date Account Title and Explanation Debit Credit Nov 1 Answer Answer Answer Answer Issued common shares b) On November 1, 2020, Earnestine, Kepplinger & Co. issued an additional 7,100 common shares in exchange for equipment and a building. The equipment was valued at $54,000 and the building valued at $134,000. Record the transaction. Date Account Title and Explanation Debit Credit Nov 1 Answer Answer Answer Answer Common Shaers Answer…arrow_forwardOn March 31, 2021, Chow Brothers, Inc., bought 10% of KT Manufacturing’s capital stock for $50 million. KT’s net income for the year ended December 31, 2021, was $80 million. The fair value of the shares held by Chow was $35 million at December 31, 2021. KT did not declare or pay a dividend during 2021.Required:1. Prepare all appropriate journal entries related to the investment during 2021.2. Assume that Chow sold the stock on January 20, 2022, for $30 million. Prepare the journal entry Chow would use to record the sale.arrow_forward
- On March 31, 2021, Chow Brothers, Inc., bought 8% of KT Manufacturing’s capital stock for $51.5 million. KT’s net income for the year ended December 31, 2021, was $80.5 million. The fair value of the shares held by Chow was $36.0 million at December 31, 2021. KT did not declare or pay a dividend during 2021. Required:1. Prepare all appropriate journal entries related to the investment during 2021.2. Assume that Chow sold the stock on January 20, 2022, for $30.5 million. Prepare the journal entries to record the sale.arrow_forwardOn January 1, 2024, Nana Company paid $100,000 for 8, 100 shares of Papa Company common stock. The ownership in Papa Company is 10%. Nana Company does not have significant influence over Papa Company. Papa reported net income of $55,000 for the year ended December 31, 2024. The fair value of the Papa stock on that date was $55 per share. What amount will be reported in the balance sheet of Nana Company for the investment in Papa at December 31, 2024? A: $400, 500B: $445, 500C: $385,500D: $ 370, 500arrow_forward8. On May 15, 2025, Mayer Co. invests $8,000 in John, Inc. stock. John, Inc. pays Mayer Co. a $200 dividend on November 15, 2025. Mayer Co. sells the John, Inc. stock on December 10, 2025, for $7,500. Assume the Mayer Co. does not have significant influence over John, Inc. Journalize the 2025 transactions related to Mayer Co.'s investment in John, Inc. stock. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Begin by journalizing Mayer Co.'s initial investment in John, Inc. stock on May 15, 2025. Date May 15, 2025 Accounts and Explanation Debit Creditarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Earnings per share (EPS), basic and diluted; Author: Bionic Turtle;https://www.youtube.com/watch?v=i2IJTpvZmH4;License: Standard Youtube License