GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
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Textbook Question
Chapter A, Problem 8P
Recording Investments for Significant Influence
LO A-3 Below are selected T-accounts for William Company.
| Investments In Affiliates | |||
| 1/1 | 56,432 | ||
| Purchase | 15,685 | ||
| Share of | Share of | ||
| affiliate net | affiliate | ||
| income | ? | 8,564 | dividends |
| 12/31 | 67,450 | ||
| Equity In Affiliate Earnings | ||
| 0 ? |
1/1 Share of affiliate net income |
|
| 3,897 | 12/31 | |
Required:
Complete the following journal entries and answer the following questions:
- a. Purchased additional investments in affiliated companies for cash. Prepare the
journal entry . - b. Received cash dividends on the investments. Prepare the journal entry.
- c. At year-end, the investments in affiliates account had a fair value of $62,000; the affiliate also reported $8,120 in net income for the year. Prepare the
adjusting entry. - d. What would be reported on the
balance sheet related to the investments in affiliates on December 31? - e. What would be reported on the income statement for the year?
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Students have asked these similar questions
20) IAS 28 Investment governs the identification of associates.
Which of the following is true?
Select one:
O a. The investing equity owned by its hare since the
incorporation of the investee equity
O b. The investor holds greater than 20% but less than 50% of
the entity power of the investee
Oc. The investing entity has some influences over entities in
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Od. The investor often trades with the invest
Watts and Lyon are forming a partnership. Watts invests $40,500 and Lyon invests $49,500. The partners agree that Watts will work
one-fourth of the total time devoted to the partnership and Lyon will work three-fourths. They have discussed the following alternative
plans for sharing income and loss: (a) in the ratio of their initial capital investments; (b) in proportion to the time devoted to the
business; (c) a salary allowance of $15,000 per year to Lyon and the remaining balance in accordance with the ratio of their initial
capital investments; or (d) a salary allowance of $15,000 per year to Lyon, 11% interest on their initial capital investments, and the
remaining balance shared equally. The partners expect the business to perform as follows: Year 1, $13,000 net loss; Year 2, $32,500
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Required:
Complete the tables, one for each of the first three years, by showing how to allocate partnership income or loss to the partners under
each of…
Case 2-1. Audit of investment in equity investments at foir volue through profit or loss; Substantive audit
procedures.
You were able to obtain the following iedger details of Equity investment-FVTPL in connection with your audit of
the Strong Corporation for the year ended December 31, 2020:
Credit
Date
Jan. 10
Particulars
Purchase of Alpha Co. - 6,000 shares
Debit
P1,440,000
Feb. 20
Purchase of Beta Co. - 7,200 shares
Sale of Beta Co. - 2,400 shares
1,800,000
Mar. 1
540,000
Receipt of Alpha share dividend- Offsetting Credit to
retained earnings
Sale of Alpha - 4,800 shares
Sale of Alpha - 1,200 shares
May 31
132,000
Aug. 15
Sept. 1
1,176,000
276,000
The following information was obtained during your examination:
• Fram independent sources, you determine the follawing dividend information for Alpha Co. in 2020:
Declared
01/02
0s/02
08/01
Record
01/15
05/15
Nature
Cash
Payment
01/31
Rate
P20/share
Share
05/31
10%
Cash
08/30
09/15
P30/share
• Closing market quotation as at December 31,…
Chapter A Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. A - Prob. 1QCh. A - Explain the difference in accounting methods used...Ch. A - Explain how bonds held to maturity are reported on...Ch. A - Explain the application of the cost principle to...Ch. A - Under the fair value method, when and how does the...Ch. A - Under the equity method, why does the investor...Ch. A - Prob. 7QCh. A - Prob. 8QCh. A - Prob. 9QCh. A - Company X owns 40 percent of Company Y and...
Ch. A - Prob. 2MCQCh. A - Dividends received from stock that is reported as...Ch. A - Prob. 4MCQCh. A - Prob. 5MCQCh. A - When using the equity method of accounting, when...Ch. A - Prob. 7MCQCh. A - Prob. 8MCQCh. A - Which of the following is true regarding the...Ch. A - Prob. 10MCQCh. A - Matching Measurement and Reporting Methods Match...Ch. A - Prob. 2MECh. A - Prob. 3MECh. A - Prob. 4MECh. A - Prob. 5MECh. A - Prob. 6MECh. A - Prob. 7MECh. A - Prob. 8MECh. A - Prob. 9MECh. A - Prob. 10MECh. A - Prob. 11MECh. A - Prob. 1ECh. A - Prob. 2ECh. A - Recording Transactions in the Available-for-Sale...Ch. A - Prob. 4ECh. A - Prob. 5ECh. A - Reporting Gains and Losses in the Trading...Ch. A - Prob. 7ECh. A - Prob. 8ECh. A - Prob. 9ECh. A - Prob. 10ECh. A - Prob. 11ECh. A - Prob. 1PCh. A - Prob. 2PCh. A - Prob. 3PCh. A - Prob. 4PCh. A - Prob. 5PCh. A - Comparing Methods to Account for Various Levels of...Ch. A - Prob. 7PCh. A - Recording Investments for Significant Influence LO...Ch. A - Prob. 9PCh. A - Prob. 10PCh. A - Prob. 11PCh. A - Prob. 1APCh. A - Prob. 2APCh. A - Reporting Passive Investments During January 2017,...Ch. A - Prob. 4APCh. A - Prob. 5APCh. A - Prob. 6APCh. A - Prob. 1CONCh. A - Finding Financial Information Refer to the...Ch. A - Prob. 2CPCh. A - Prob. 3CPCh. A - Prob. 4CPCh. A - Prob. 5CPCh. A - Prob. 6CP
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