HomeworkLib
Question

Sunland Company purchased 100 of the 1000 outstanding shares of Darby Company's common stock for $660000 on January 2, 2...

Sunland Company purchased 100 of the 1000 outstanding shares of Darby Company's common stock for $660000 on January 2, 2018. During 2018, Darby Company declared dividends of $130000 and reported earnings for the year of $460000.

If Sunland Company uses the equity method of accounting for its investment in Darby Company, its Equity Investments (Darby) account at December 31, 2018 should be

$660000.
$693000.
$706000.
$647000.
business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Ownership percentage = 100/1000 = 10%

Equity investment account balance

= 660,000 + Share in earnings - Share in dividends

= 660,000 + (460,000*10%) - (130,000*10%)

= 660,000 + 46,000 - 13,000

= 693,000

Option B is the answer

0 0
Add a comment
Know the answer?
Add Answer to:
Sunland Company purchased 100 of the 1000 outstanding shares of Darby Company's common stock for $660000 on January 2, 2...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Blanco Company purchased 200 of the 1,000 outstanding shares of Darby Company's common stock for $600,000...

    Blanco Company purchased 200 of the 1,000 outstanding shares of Darby Company's common stock for $600,000 on January 2, 2013. During 2013, Darby Company declared dividends of $100,000 and reported earnings for the year of $400,000. If Blanco Company uses the equity method of accounting for its investment in Darby Company, its Equity Investment (Darby) account at December 31, 2013 should be Question 30 options: $580,000. $600,000. $660,000. $680,000.

  • 3. Fellingham Company purchased 200 of the 1,000 outstanding shares of Bing Company's common stock for...

    3. Fellingham Company purchased 200 of the 1,000 outstanding shares of Bing Company's common stock for $60,000 on January 2, x1. During x1, Bing Company declared dividends of $10,000 and reported earnings for the year of $40,000. If Fellingham Company uses the equity method of accounting for its investment in Bing Company, its Investment in Bing Company account at December 31, x1 should be Select one: a. $66,000. b. $58,000. c. $60,000. d. $68,000.

  • On January 1, 2020, Redmond Company purchased 3,000 of the 15,000 outstanding shares of common stock...

    On January 1, 2020, Redmond Company purchased 3,000 of the 15,000 outstanding shares of common stock of Decca Computer (DC) Corporation for $80,000 cash as a long-term investment (the only long-term equity invest- ment held). The assets and liabilities of DC Corporation at the date of purchase approximate fair value. During 2020, DC reported net income of $25,000 and declared and paid cash dividends of $10,000. The fair value of DC Corporation at December 31, 2020, was $25 per share....

  • On December 31, 2016, Akron, Inc. purchased 5 Percent of Zip Company's common shares on the...

    On December 31, 2016, Akron, Inc. purchased 5 Percent of Zip Company's common shares on the open market in exchange for $16,800. On December 31, 2017, Akron, Inc., acquires an additional 25 percent of Zip Company's outstanding common stock for $96,250. During the next two years, the following information is available for Zip Company: Income Dividends Declared Common Stock Fair Value (12/31) 2016 $322,000 2017 $81,000 $6,300 385,000 2018 92,000 14,700 479,000 At December 31, 2017, Zip reports a net...

  • On January 2, 2018 Pod Company purchased 25% of the outstanding common stock of Jobs, Inc....

    On January 2, 2018 Pod Company purchased 25% of the outstanding common stock of Jobs, Inc. and subsequently used the equity method to account for the investment. During 2018 Jobs, Inc. reported net income of $1,260,000 and distributed dividends of $540,000. The ending balance in the Investment in Pod Company account at December 31, 2018 was $960,000 after applying the equity method during 2018. What was the purchase price Pod Company paid for its investment in Jobs, Inc? Select one:...

  • Player Corporation purchased 100 percent of Scout Company's common stock on January 1, 20X5, and paid...

    Player Corporation purchased 100 percent of Scout Company's common stock on January 1, 20X5, and paid $37,000 above book value. The full amount of the additional payment was attributed to amortizable assets with a life of eight years remaining at January 1, 20X5. During 20X5 and 20X6, Scout reported net income of $38,000 and $7,000 and paid dividends of $16,000 and $13,000, respectively. Player uses the equity method in accounting for its investment in Scout and reported a balance in...

  • Question: On January 1, 2020, Sunland Corporation purchased 36% of the common stock outstanding of Blossom...

    Question: On January 1, 2020, Sunland Corporation purchased 36% of the common stock outstanding of Blossom Corporation for $67,000. During 2020, Blossom Corporation reported net income of $220,000 and paid cash dividends of $100,000. The balance of the Stock Investments - Blossom account on the books of Sunland Corporation at December 31,2020 is: a) 713,200 b) 749,200 c) 634,000 d) 670,000

  • Port Company purchased 44,400 of the 111,000 outstanding shares of Sund Company common stock on January...

    Port Company purchased 44,400 of the 111,000 outstanding shares of Sund Company common stock on January 1, 20X2, for $196,000. The purchase price was equal to the book value of the shares purchased. Sund reported the following: Year Net Income Dividends 20X2 $ 41,000 $ 26,000 20X3 31,000 20X4 7,000 Required: Compute the amounts Port Company should report as the carrying values of its investment in Sund Company at December 31, 20X2, 20X3, and 20X4.   

  • On December 31, 2016, Akron, Inc. purchased 5 Percent of Zip Company's common shares on the...

    On December 31, 2016, Akron, Inc. purchased 5 Percent of Zip Company's common shares on the open market in exchange for $16,800. On December 31, 2017, Akron, Inc., acquires an additional 25 percent of Zip Company's outstanding common stock for $97,000. During the next two years, the following information is available for Zip Company: Income Dividends Declared Common Stock Fair Value (12/31) 2016 $324,000 2017 $70,000 $7,100 388,000 2018 82,000 14,200 481,000 At December 31, 2017, Zip reports a net...

  • On December 31, 2016, Akron, Inc. purchased 5 Percent of Zip Company's common shares on the...

    On December 31, 2016, Akron, Inc. purchased 5 Percent of Zip Company's common shares on the open market in exchange for $17,100. On December 31, 2017, Akron, Inc., acquires an additional 25 percent of Zip Company's outstanding common stock for $95,000. During the next two years, the following information is available for Zip Company: Income Dividends Declared Common Stock Fair Value (12/31) 2016 $313,000 2017 $68,000 $6,600 380,000 2018 85,000 14,400 470,000 At December 31, 2017, Zip reports a net...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT