On January 1, 2024, Clor-Proell Enterprises bought 20% of the outstanding common stock of Chen Construction Company for $600million cash. Chen's net income for the year ended December 31, 2024, was $300 million. During 2024, Chen declared and paid cashdividends of $60 million. Clor-Proell recorded the investment as follows:PURCHASEGeneral JournalInvestment in Chen Construction sharesCashNET INCOME($ in millions)DebitCredit600600Investment in Chen Construction shares (20% x $300 million)60Investment revenue60DIVIDENDSCash (20% x $60 million)1212Investment in Chen Construction sharesRequired:What would be the pretax amounts related to the investment that Clor-Proell would report in its statement of cash flows for the yearended December 31, 2024?Note: Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Cash outflows should be indicated with a minussign.Operating activities$600Investing activities$60Financing activities$12

To determine the pretax amounts related to the investment that Clor-Proell would report in its…

Answered: On January 1, 2024, Clor-Proell…

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

See similar textbooks

Similar questions

At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31, 2026? What is the total net income reported in 2026 under each of these methods?Kingbird Donald Inc. acquired 20% of the outstanding common stock of Theresa Ivanhoe Inc. on December 31, 2025. The purchase price was $1,205,000 for 48,200 shares. Ivanhoe Inc. declared and paid an $0.85 per share cash dividend on June 30 and on December 31,2026 . Ivanhoe reported net income of $692,000 for 2026 . The fair value of Ivanhoe's stock was $28 per share at December 31 ,2026, Assume that the security is a trading security.
On January 25, 2023, Martin Ltd. purchased 5,000 common shares of NBC (National Bank of Canada) for $30 each. During the remainder of 2023, Martin received $1.60/share in dividends and NBC's earnings per share were $4.50. The closing price of the shares on the fiscal year-end date of December 31, 2023, was $31. Required Assume that Martin classified the investment as FVPL. a. At what value should the company report the NBC shares on its December 31, 2023, balance sheet? b. How much income should the company report in relation to these shares? c. How much other comprehensive income (OCI) should Martin report in relation to these shares? Requirement a. Assume that Martin classified the investment as FVPL. At what value should the company report the NBC shares on its December 31, 2023, balance sheet? The company should report the NBC shares at per share for a total of $ at December 31, 2023. Requirement b. Assume that Martin classified the investment as FVPL. How much income should the co
Suppose that AXE company acquires exactly 25% of the voting common stock of Company SARDAR Inc. for $3,000,000 at the beginning of the year 2020. Pfizer company reports $1,200,000 earnings for the year in its net income and pays $550,000 in cash dividends at the end of the year 2020. 1. Using the cost method, what is the investment income and the balance sheet investment account balance respectively for AXE company? * A) $137,500, $3,000,000 B) $300,000; $3,162,500 C) $137,500; $2,300,000 D) None of the above. 2. Using the equity method, what is the investment income and the balance sheet investment account balance respectively for AXE company? * A) $137,500, $3,000,000 B) $300,000; $3,162,500 C) $137,500; $2,300,000 D) None of the above.
On January 1, 2019, Lallo Company purchased 15% of Vintar Company’s ordinary shares for P20,000,000. The following data concerning Vintar Company are available: 2019 2020 Net income P6,000,000 P7,000,000 Cash dividend paid None 15,000,000 In its income statement for the year ended December 31, 2020, how much should Lallo report as income from this investment?
On April 1, 2024, Sheridan Company purchased 34,400 common shares in Ecotown Ltd. for $18 per share. Management has designated the investment as FVTOCI. On December 5, Ecotown paid dividends of $0.10 per share and its shares were trading at $20 per share on December 31. Prepare the required entries to record the purchase, dividends, and year-end adjusting journal entry (if any) for this 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. Record journal entries in the order presented in the problem. List all debit entries before credit entries) Date 10 Account Titles Debit Credit
On January 1, 2020, Windsor Company purchased 6,100 shares of Kusher Company stock for $439,200. Windsor's investment represents 30 percent of the total outstanding shares of Kusher. During 2020, Kusher paid total dividends of $152,000 and reported net income of $456,000. What revenue does Windsor report related to this investment and what is the amount to be reported as an investment in Kusher stock at December 31? Revenue $ Investment in Kusher stock at December 31 $
On April 1, 2024, Sandhill Company purchased 46,400 common shares in Ecotown Ltd. for $13 per share. Management has designated the investment as FVTOCI. On December 5, Ecotown paid dividends of $0.10 per share and its shares were trading at $15 per share on December 31. Prepare the required entries to record the purchase, dividends, and year-end adjusting journal entry (if any) for this 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. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date Save for Later Account Titles Debit Credit Attempts: 0 of 1 used Submit Answer
On July 1, 2021, JKJ Corporation purchased 100 common shares of JMK Ltd. at $20 per share. JKJ expected to be able to sell this investment within a year at $28 per share. Dividends of $1 per share were declared and paid on August 1, 2021. On December 31, 2021, the fair value of each share was $23. What balance was shown in the investment account on JKJ's balance sheet on December 31 (year end)? $2,300 $2,400 $2,000 $2,800
The balance sheet of the proprietorship of Jacob as of June 30, 2018 showed the following assets andliabilities:Cash P 40,000Accounts Receivable 53,600Inventory 88,000Equipment 65,600Accounts Payable 63,520The cash balance included a 200- share certificate of BW Resources common at acquisition cost of P 1,600; the current market quotation is 70 per share. Of the accounts receivable, an estimated 5% is considered to be doubtful of collection. Certain inventory items, booked at a cost of P22,960, are currently worth P16,000. Depreciation has not been recorded; the equipment, acquired two years ago, has a remaining useful life of about eight more years. Prepaid expense of P 12,800 and accrued expense of P 6,120 have not been properly recognized. Emily and Bert will join Jacob in a partnership. Jacob will invest the net assets of his business, after effecting the appropriate adjustments, and he will be allowed credit for goodwill equal to 10% of his initial capital credit. Emily and Bert…
On December 31, 2020, Ryan Corp, acquired a 40% Interest in Gosling Corp. for $ 315,000. During 2021, Gosling reported net income of $200,000 and paid total cash dividends of $ 50,000. Assuming Ryan uses the equity method, at December 31. 2021, the balance in the investment account should be OA) $375,000. OB) $ 395,000. OC) $255,000. OD) $295,000.
Use the info below to answer the following questions: On January 2, 2021, Pirate, Inc. purchased a 30% interest in Tee Corp. for $3, 000, 000 cash. During 2021, Tee's net income was S3, 500, 000 and it paid dividends of S1, 000, 000. Pirate's 2021 income from Tee was: Pirate's Equity Investment balance in Tee at December 31, 2021 will be:
Handley Ltd. acquired 42% of the common shares of Lecce Ltd. on January 1, 2024, by paying $5.68 million for 142,000 shares. Lecce declared a cash dividend of $0.60 per share in each quarter that Handley received on March 20, June 20, September 20, and December 20. Lecce reported net income of $1.42 million for the year. At December 31, the market price of the Lecce shares was $44 per share.

SEE MORE QUESTIONS

Recommended textbooks for you

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Financial Accounting

Accounting

ISBN:

9781305088436

Author:

Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:

Cengage Learning

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Financial Accounting

Accounting

ISBN:

9781305088436

Author:

Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:

Cengage Learning

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS