Percy Company uses the complete equity method to record its investment. The difference between book value of equity acquired and the value implied by the purchase price was attributed solely to an excess of market over book values of depreciable assets, with a remaining life of 10 years.
Homework Answers
| $2,014 | $2,015 | 2016 | ||
| Net Income(loss) | $60,600 | $53,600 | -$57,200 | |
| Dividend distribution | $23,800 | $50,600 | $36,300 | |
| Purchase price | $406,000 | |||
| Less: book value | $397,440 | |||
| Goodwill attributable to depreciable assets | $8,560 | |||
| (14) | Investment in subsidiary | $406,000 | ||
| Cash | $406,000 | |||
| (To record the investment in Song company) | ||||
| Investment in subsidiary | $48,400 | |||
| Equity income | $48,400 | |||
| (To record equity(loss)) | ||||
| Equity Income | $856 | 8560/10 | ||
| Investment in subsidiary | $856 | 8560/10 | ||
| (to record amortization) | ||||
| Cash A/c | $19,040 | (23,800*80%) | ||
| Investment in subsidiary | $19,040 | (23,800*80%) | ||
| (To record dividend income) | ||||
| (15) | ||||
| Investment in subsidiary | $42,880 | (53,600*80%) | ||
| Equity income | $42,880 | (53,600*80%) | ||
| (To record equity(loss)) | ||||
| Equity Income | $856 | 8560/10 | ||
| Investment in subsidiary | $856 | 8560/10 | ||
| (to record amortization) | ||||
| Cash A/c | $40,480 | (50,600*80%) | ||
| Investment in subsidiary | $40,480 | (50,600*80%) | ||
| (To record dividend income) | ||||
| 16 | Equity income | $45,760 | (57200*80%) | |
| Investment in subsidiary | $45,760 | (57200*80%) | ||
| (to record loss) | ||||
| Equity Income | $856 | 8560/10 | ||
| Investment in subsidiary | $856 | 8560/10 | ||
| (to record amortization) | ||||
| Cash A/c | $29,040 | (36,300*80%) | ||
| Investment in subsidiary | $29,040 | (36,300*80%) | ||
| (To record dividend income) | ||||
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Percy Company uses the complete equity method to record its
investment. The difference between book value...
Exercise 4-1 Percy Company purchased 80% of the outstanding voting shares of Song Company at the...
Exercise 4-1 Percy Company purchased 80% of the outstanding voting shares of Song Company at the beginning of 2014 for $406,000. At the time of purchase, Song Company's total stockholders' equity amounted to $496,800. Income and dividend distributions for Song Company from 2014 through 2016 are as follows: Net Income (loss) Dividend distribution 2014 2015 2016 $60,600 $53,900 ($57,200 ) 23,800 50,600 36,300 Prepare journal entries on the books of Percy Company from the date of purchase through 2016 to...
Exercise 4-1 Percy Company purchased 80% of the outstanding voting shares of Song Company at the...
Exercise 4-1 Percy Company purchased 80% of the outstanding voting shares of Song Company at the beginning of 2014 for $406,000. At the time of purchase, Song Company's total stockholders' equity amounted to $496,800. Income and dividend distributions for Song Company from 2014 through 2016 are as follows: Net Income (loss) Dividend distribution 2014 2015 2016 $60,600 $53,900 ($57,200 ) 23,800 50,600 36,300 Prepare journal entries on the books of Percy Company from the date of purchase through 2016 to...
EXERCISE 4-1 Parent Company Entries, Liquidating Dividend LO 2 Perey Company purchased 80% of the outstanding...
EXERCISE 4-1 Parent Company Entries, Liquidating Dividend LO 2 Perey Company purchased 80% of the outstanding voting shares of Song Company at the beginning of 2014 for $387,000. At the time of purchase, Song Company's total stockholders' equity amounted to $475,000. Income and dividend distributions for Song Company from 2014 through 2016 are as follows: 2016 Net income (loss) Dividend distribution 2014 563,500 25,000 2015 $52,500 50,000 (555,000) 35,000 Required: Prepare journal entries on the books of Perey Company from...
Problem 4-1 On January 1, 2011, Perelli Company purchased 90,000 of the 100,000 outstanding shares of...
Problem 4-1 On January 1, 2011, Perelli Company purchased 90,000 of the 100,000 outstanding shares of common stock of Singer Company as a long-term investment. The purchase price of $4,934,300 was paid in cash. At the purchase date, the balance sheet of Singer Company included the following: Current assets Long-term assets Other assets Current liabilities Common stock, $20 par value Other contributed capital Retained earnings $2,954,600 3,908,000 757,000 1,553,500 2,010,600 1,844,200 1,609,200 Additional data on Singer Company for the four...
a) use the cost method for investment in singer B)use the partial equity method to record...
a) use the cost method for investment in singer
B)use the partial equity method to record its investment.
c)use the complete equity method to record its investment.
please do all 3 parts and show work.
c)uses the complete equity method to record its investment.
Problem 4-1 On January 1, 2011, Perelli Company purchased 90,000 of the 100,000 outstanding shares of common stock of Singer Company as a long-term investment. The purchase price of $4,934,300 was paid in cash. At the...
Exercise 4-6 On January 1, 2014, Pert Company purchased 85% of the outstanding common stock of...
Exercise 4-6 On January 1, 2014, Pert Company purchased 85% of the outstanding common stock of Sales Company for $352,500. On that date, Sales Company's stockholders' equity consisted of common stock, $100,400; other contributed capital, $40,500; and retained earnings, $143,800. Pert Company paid more than the book value of net assets acquired because the recorded cost of Sales Company's land was significantly less than its fair value. During 2014 Sales Company earned $153,600 and declared and paid a $50,300 dividend....
Equity method journal entries (price greater than book value) An investor purchases a 30% interest in...
Equity method journal entries (price greater than book value) An investor purchases a 30% interest in an investee company, and the investor concludes that it can exert significant influence over the investee. The book value of the investee's Stockholders' Equity on the acquisition date is $500,000, and the investor purchases its 30% interest for $195,000. The investor is willing to pay the purchase price because the investee owns an unrecorded (internally developed) patent that the investor estimates is worth $150,000....
Exercise 4-7 On January 1, 2014, Pert Company purchased 85% of the outstanding common stock of...
Exercise 4-7 On January 1, 2014, Pert Company purchased 85% of the outstanding common stock of Sales Company for $361,700. On that date, Sales Company's stockholders' equity consisted of common stock, $93,900; other contributed capital, $37,000; and retained earnings, $148,500. Pert Company paid more than the book value of net assets acquired because the recorded cost of Sales Company's land was significantly less than its fair value. During 2014 Sales Company earned $134,900 and declared and paid a $50,500 dividend....
Exercise 4-7 On January 1, 2014, Pert Company purchased 85% of the outstanding common stock of...
Exercise 4-7 On January 1, 2014, Pert Company purchased 85% of the outstanding common stock of Sales Company for $361,700. On that date, Sales Company's stockholders' equity consisted of common stock, $93,900; other contributed capital, $37,000; and retained earnings, $148,500. Pert Company paid more than the book value of net assets acquired because the recorded cost of Sales Company's land was significantly less than its fair value. During 2014 Sales Company earned $134,900 and declared and paid a $50,500 dividend....
1) If P Co. uses equity method, the entry to record net loss reported by S...
1) If P Co. uses equity method, the entry to record
net loss reported by S Co. in year 2019 will include: *
a) Credit Cash $27,000
b) Debit Equity Loss $27,000
c) Debit Equity Income $27,000
d) Debit Investment in S Co $27,000
2) If P Co. uses cost method, the entry to record
distributed dividend by S Co. in year 2018 will include: *
a) Credit Investment in S Co. $45,000
b) Debit Cash $45,000
c) Credit Investment...
Exercise 4-1 Percy Company purchased 80% of the outstanding voting shares of Song Company at the beginning of 2014 for $406,000. At the time of purchase, Song Company's total stockholders' equity amounted to $496,800. Income and dividend distributions for Song Company from 2014 through 2016 are as follows: Net Income (loss) Dividend distribution 2014 2015 2016 $60,600 $53,900 ($57,200 ) 23,800 50,600 36,300 Prepare journal entries on the books of Percy Company from the date of purchase through 2016 to...
Exercise 4-1 Percy Company purchased 80% of the outstanding voting shares of Song Company at the beginning of 2014 for $406,000. At the time of purchase, Song Company's total stockholders' equity amounted to $496,800. Income and dividend distributions for Song Company from 2014 through 2016 are as follows: Net Income (loss) Dividend distribution 2014 2015 2016 $60,600 $53,900 ($57,200 ) 23,800 50,600 36,300 Prepare journal entries on the books of Percy Company from the date of purchase through 2016 to...
EXERCISE 4-1 Parent Company Entries, Liquidating Dividend LO 2 Perey Company purchased 80% of the outstanding voting shares of Song Company at the beginning of 2014 for $387,000. At the time of purchase, Song Company's total stockholders' equity amounted to $475,000. Income and dividend distributions for Song Company from 2014 through 2016 are as follows: 2016 Net income (loss) Dividend distribution 2014 563,500 25,000 2015 $52,500 50,000 (555,000) 35,000 Required: Prepare journal entries on the books of Perey Company from...
Problem 4-1 On January 1, 2011, Perelli Company purchased 90,000 of the 100,000 outstanding shares of common stock of Singer Company as a long-term investment. The purchase price of $4,934,300 was paid in cash. At the purchase date, the balance sheet of Singer Company included the following: Current assets Long-term assets Other assets Current liabilities Common stock, $20 par value Other contributed capital Retained earnings $2,954,600 3,908,000 757,000 1,553,500 2,010,600 1,844,200 1,609,200 Additional data on Singer Company for the four...
a) use the cost method for investment in singer
B)use the partial equity method to record its investment.
c)use the complete equity method to record its investment.
please do all 3 parts and show work.
c)uses the complete equity method to record its investment.
Problem 4-1 On January 1, 2011, Perelli Company purchased 90,000 of the 100,000 outstanding shares of common stock of Singer Company as a long-term investment. The purchase price of $4,934,300 was paid in cash. At the...
Exercise 4-6 On January 1, 2014, Pert Company purchased 85% of the outstanding common stock of Sales Company for $352,500. On that date, Sales Company's stockholders' equity consisted of common stock, $100,400; other contributed capital, $40,500; and retained earnings, $143,800. Pert Company paid more than the book value of net assets acquired because the recorded cost of Sales Company's land was significantly less than its fair value. During 2014 Sales Company earned $153,600 and declared and paid a $50,300 dividend....
Equity method journal entries (price greater than book value) An investor purchases a 30% interest in an investee company, and the investor concludes that it can exert significant influence over the investee. The book value of the investee's Stockholders' Equity on the acquisition date is $500,000, and the investor purchases its 30% interest for $195,000. The investor is willing to pay the purchase price because the investee owns an unrecorded (internally developed) patent that the investor estimates is worth $150,000....
Exercise 4-7 On January 1, 2014, Pert Company purchased 85% of the outstanding common stock of Sales Company for $361,700. On that date, Sales Company's stockholders' equity consisted of common stock, $93,900; other contributed capital, $37,000; and retained earnings, $148,500. Pert Company paid more than the book value of net assets acquired because the recorded cost of Sales Company's land was significantly less than its fair value. During 2014 Sales Company earned $134,900 and declared and paid a $50,500 dividend....
Exercise 4-7 On January 1, 2014, Pert Company purchased 85% of the outstanding common stock of Sales Company for $361,700. On that date, Sales Company's stockholders' equity consisted of common stock, $93,900; other contributed capital, $37,000; and retained earnings, $148,500. Pert Company paid more than the book value of net assets acquired because the recorded cost of Sales Company's land was significantly less than its fair value. During 2014 Sales Company earned $134,900 and declared and paid a $50,500 dividend....
1) If P Co. uses equity method, the entry to record
net loss reported by S Co. in year 2019 will include: *
a) Credit Cash $27,000
b) Debit Equity Loss $27,000
c) Debit Equity Income $27,000
d) Debit Investment in S Co $27,000
2) If P Co. uses cost method, the entry to record
distributed dividend by S Co. in year 2018 will include: *
a) Credit Investment in S Co. $45,000
b) Debit Cash $45,000
c) Credit Investment...
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