Homework Answers
| A. | |||||||||
| Calculation of percentage shares acquired by Herrera corporation | |||||||||
| Percentage shares acquired | 229500/850000 | ||||||||
| Percentage shares acquired | 27.00% | ||||||||
| Journal entry to record share in net income | |||||||||
| General Journal | Debit | Credit | |||||||
| Investment in Tran corp (974000*27%) | $262,980 | ||||||||
| Income from equity investment | $262,980 | ||||||||
| (To record share in net income) | |||||||||
| Journal entry to record cash dividend received | |||||||||
| General Journal | Debit | Credit | |||||||
| Cash (0.28*229500) | $64,260 | ||||||||
| Investment in Tran corp | $64,260 | ||||||||
| (To record cash dividend received) | |||||||||
| B. | |||||||||
| Herrera corporation owns 27% shares in Tran corp which indicates significant influence and thus equity method of accounting is recommended. | |||||||||
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At a total cost of $6,950,000, Herrera Corporation acquired 229,500 shares of Tran Corp. common stock...
At a total cost of $6,290,000, Herrera Corporation acquired 161,000 shares of Tran Corp. common stock...
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CHART OF ACCOUNTS Herrera Corporation General Ledger ASSETS 110 Cash 111 Petty Cash 120 Accounts...
CHART OF ACCOUNTS
Herrera Corporation
General Ledger
ASSETS
110
Cash
111
Petty Cash
120
Accounts Receivable
121
Allowance for Doubtful Accounts
131
Notes Receivable
132
Interest Receivable
141
Merchandise Inventory
145
Office Supplies
146
Store Supplies
151
Prepaid Insurance
161
Investment in Tran Corp. Stock
165
Valuation Allowance for Trading Investments
166
Valuation Allowance for Available-for-Sale Investments
181
Land
191
Store Equipment
192
Accumulated Depreciation-Store Equipment
193
Office Equipment
194
Accumulated Depreciation-Office Equipment
LIABILITIES
210
Accounts Payable
221
Notes Payable...
Equity method for stock investment Chart of Accounts Journal Final Question Instructions At a total cost...
Equity method for stock investment Chart of Accounts Journal Final Question Instructions At a total cost of $6,460,000. Herrera Corporation acquired 187 000 shares of Tran Corp.common stock as a long term investiert. Herrera Corporation uses the accounting for this investment. Tran Corp has 850,000 shares of common stock outstanding, ncluding the shores cuired by Herrera Corporation ty method of Required: A Journalize the entries by Herrera Corporation on December 31 to record the following information (refer to the Chart...
Equity method for stock investment Instructions Chart of Accounts Journal Final Question Instructions Al 6.290.000. Ferrera...
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Instructions Vincent Corporation has 95,000 shares of $110 par common stock outstanding. On June 30, Vincent...
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Instructions On April 10, a company acquired land in exchange for 1,000 shares of $20 par...
Instructions On April 10, a company acquired land in exchange for 1,000 shares of $20 par common stock with a current market price of $73. Required: Journalize this transaction. Refer to the Chart of Accounts for exact wording of account titles.
Instructions At a total cost of $6,290,000, Hra Corporation acquired 161,000 shares of Tran Corp. common stock as a long-term investment. Herrera Corporation uses the equity method of accounting for this investment. Tran Corp. has 700,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation. Required: A. Journalize the entries by Herrera Corporation on December 31 to record the following information (refer to the Chart of Accounts for exact wording of account titles): 1. Tran Corp. reports...
CHART OF ACCOUNTS
Herrera Corporation
General Ledger
ASSETS
110
Cash
111
Petty Cash
120
Accounts Receivable
121
Allowance for Doubtful Accounts
131
Notes Receivable
132
Interest Receivable
141
Merchandise Inventory
145
Office Supplies
146
Store Supplies
151
Prepaid Insurance
161
Investment in Tran Corp. Stock
165
Valuation Allowance for Trading Investments
166
Valuation Allowance for Available-for-Sale Investments
181
Land
191
Store Equipment
192
Accumulated Depreciation-Store Equipment
193
Office Equipment
194
Accumulated Depreciation-Office Equipment
LIABILITIES
210
Accounts Payable
221
Notes Payable...
Equity method for stock investment Chart of Accounts Journal Final Question Instructions At a total cost of $6,460,000. Herrera Corporation acquired 187 000 shares of Tran Corp.common stock as a long term investiert. Herrera Corporation uses the accounting for this investment. Tran Corp has 850,000 shares of common stock outstanding, ncluding the shores cuired by Herrera Corporation ty method of Required: A Journalize the entries by Herrera Corporation on December 31 to record the following information (refer to the Chart...
Equity method for stock investment Instructions Chart of Accounts Journal Final Question Instructions Al 6.290.000. Ferrera Corporation acquired 161,000 shares of Tran Corp.common stock as a long term rivestiment. Herrera Cri ses the equity method of accounting for this investment Tran Corp. has 700,000 shares of common stock standing, nudng the shares acquired by Herrera Corporation Required A Journame the entries by Herrera Corporation on December 31 to record the following information refer to the Chart of Accounts for exact...
Instructions Vincent Corporation has 95,000 shares of $110 par common stock outstanding. On June 30, Vincent Corporation declared a 6% stock dividend to be issued on July 30 to stockholders of record July 15. The market price of the stock was $118 a share on June 30. Required: Journalize the entries required on June 30 and July 30. i no entry is required, simply skip to the next transaction Refer to the Chart of Accounts for exact wording of account...
Instructions On April 10, a company acquired land in exchange for 1,000 shares of $20 par common stock with a current market price of $73. Required: Journalize this transaction. Refer to the Chart of Accounts for exact wording of account titles.
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