Homework Answers
| a. The following journal entry will be prepared on 1/2/19 to record the investment: | |||
| Date | Account Titles and Explanation | Debit | Credit |
| 01-02-2019 | Investment in T Inc's Common Stock | 850000 | |
| Cash | 850000 | ||
| b. Assuming that Acquirer is an insignificant owner of T, the following journal entries will be prepared: | |||
| Date | Account Titles and Explanation | Debit | Credit |
| 12/31/19 | Cash ($200,000 x 10%) | 20000 | |
| Dividend Income | 20000 | ||
| 12/31/19 | Unrealized holding loss on investments | 90000 | |
| Investment in T Inc's Common Stock | 90000 | ||
| c. Assuming INSTEAD that Acquirer is a significant owner of T, the following journal entries will be prepared: | |||
| 12/31/19 | Cash ($200,000 x 10%) | 20000 | |
| Investment in T Inc's Common Stock | 20000 | ||
| 12/31/19 | Investment in T Inc's Common Stock | 75000 | |
| Equity in T Inc's Income | 75000 | ||
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For the equity method i dont know, this was all that was given to me in...
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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.
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Check my Exercise 12-23 (Algo) Equity method [LO12-6, 12-7) On January 1, 2021, Cameron Inc. bought 10% of the outstanding common stock of Lake Construction Company for $170 million cash, giving Cameron the ability to exercise significant influence over Lake's operations. At the date of acquisition of the stock, Lake's net assets had a fair value of $700 million. Its book value was $600 million. The difference was attributable to the fair value of Lake's buildings and its land exceeding...
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...
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