On January 1, Poitras Ltée, a public company, purchases 20% of Blue Corporation's common shares for $256,000 for strategicpurposes. For the year ended December 31, Blue reports profit of $217,000 and pays a $14,000 cash dividend. The fair value ofPoitras's investment in Blue at December 31 is $279,000.Prepare journal entries required assuming Poitras has significant influence over Blue. (Record entries in the order displayed in theproblem statement. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Ifno entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before creditentries.)DateAccount Titles and Explanation(To record investment income.)(To record collection of dividend.)DebitCredit

Answered: On January 1, Poitras Ltée, a public…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 25E

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Prepare general journal entries for the following transactions, identifying each transaction by letter: (a) Gnu Company issued 5,000 shares of 1 par common stock to the Prendergas law firm as partial payment of fees incurred to incorporate the business. Gnu was short of cash, so Prendergas agreed to accept 10,000 cash and the shares of common stock in full settlement of its bill for 55,000. (b) Gnu issued 50,000 shares of 1 par common stock in exchange for a parcel of land for building a shopping plaza. (The list price for the land was 400,000; a similar parcel in the same area sold last week for 380,000. During the past month, the price at which Gnus common stock has traded on the open market has ranged from 5 to 12 per share. Two trades occurred yesterday at 7 and 10 per share.) (c) Gnu purchased 10,000 shares of 1 par value common treasury stock for 70,000. (This is the only treasury stock that Gnu holds.) (d) Gnu sold 4,000 shares of common treasury stock for 32,000. (e) Gnu sold 5,000 shares of common treasury stock for 30,000.
Blue Spruce Corporation purchased 300 common shares of Burke Inc. for $22,830 and accounted for them using FV-OCI. During the year, Burke paid a cash dividend of $3.45 per share. At year end, Burke shares had a fair value of $72.50 per share. (a) Prepare Blue Spruce's journal entry to record the purchase of the investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
On May 20, Montero Company paid $240,000 to acquire 105 shares (5%) of ORD Corporation as a long-term investment. On August 5, Montero sold one-tenth of the ORD shares for $25,500. 1. Prepare entries to record both the acquisition and the sale of these shares. 2. Should this stock investment be reported at fair value or at cost on the balance sheet? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare entries to record both the acquisition and the sale of these shares. View transaction list
Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts.On December 31, Padre acquires Sol’s outstanding stock by paying $360,000 in cash and issuing 10,000 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $20,000 as well as $5,000 in stock issuance costs.Determine the value that would be shown in Padre’s consolidated financial statements for each of the accounts listed.
Tamarisk Corporation purchased 380 shares of Sherman Inc. common stock for $13,300 (Tamarisk does not have significant influence). During the year, Sherman paid a cash dividend of $3.25 per share. At year-end, Sherman stock was selling for $37.00 per share.Prepare Tamarisk's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (
On May 20, Montero Company paid $180,000 to acquire 55 shares (9%) of ORD Corporation as a long-term investment. On August 5, Montero sold one-tenth of the ORD shares for $20,500. 1. Prepare entries to record both the acquisition and the sale of these shares. 2. Should this stock investment be reported at fair value or at cost on the balance sheet? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare entries to record both the acquisition and the sale of these shares. View transaction list Journal entry worksheet 1 2 > On May 20, Montero Company paid $180,000 to acquire 55 shares (9%) of ORD Corporation as a long-term investment. Note: Enter debits before credits. Date General Journal Debit Credit May 20 Record entry Clear entry View general journal
Carla, Inc. purchased 1,810 shares of Oneida Corporation common stock for $84,600. During the year. Oneida paid a cash dividend of $1.10 per share. At year-end, Oneida stock was selling for $43.90 per share. Prepare Carla's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) (a) (b) (c) Account Titles and Explanation Debit Credit
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Chowking Company engaged in the following investment transactions during the current year: February 1 Purchased 5,000 ordinary shares of ZZZ Company for P200 per share plus a brokerage commission of P50,000. These shares are classified as trading securities. June 25 Received P120 per share dividend on ZZZ Company shares. October 1 Purchased 20,000 shares of XXX Company for P150 per share plus brokerage fee of P100,000. These shares are designated at FVOCI. December 31 Received P50 per share dividend on XXX Company shares. 31 ZZZ Company shares are selling for P250 and XXX shares are selling for P180. What net amount of income should be reported for the current year?
Marigold Corporation purchased 420 shares of Nolan Inc. common stock for $14,200 (Marigold does not have significant influence). During the year, Nolan paid a cash dividend of $3.25 per share. At year-end, Nolan stock was selling for $35.00 per share. (a) Prepare Marigold's journal entry to record the purchase of the investment. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit
On May 12, Year 1, Chewco Co. purchased 2,000 shares of Jedi Inc. for $112 per share, including the brokerage commission. The Jedi investment was classified as an available-for-sale security. On December 31, Year 1, the fair value of Jedi Inc. was $124 per share. The net income of Chewco Co. was $50,000 for Year 1.Compute the comprehensive income for Chewco Co. for the year ended December 31,Year 1.
Marigold Corporation purchased 440 shares of Sherman Inc. common stock for $14,400 (Marigold does not have significant influence). During the year, Sherman paid a cash dividend of $3.25 per share. At year-end, Sherman stock was selling for $37.00 per share.Prepare Marigold's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.)

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