!Required information[The following information applies to the questions displayed below.]The following information pertains to Rossow Corporation and its investee Reimer Company:a. Rossow purchased 1,900 shares of Reimer on July 12, 2021, for $72,200;b. Reimer reported $45,000 net income on December 31, 2021;c. Reimer's stock price was $44 on December 31, 2021;d. Reimer declared and paid a $3 per share cash dividend on May 1, 2022;e. Reimer reported $45,000 net income on December 31, 2022; andf. Reimer's stock price was $39 on December 31, 2022.2. Prepare journal entries to record the facts in the case, assuming Rossow owns 43 percent of Reimer's stock. Reimer reported$45,000 of net income each year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the firstaccount field.)View transaction listJournal entry worksheetA B CRecord the purchase of 1,900 shares (43%) of Reimer Company for $72,200.The company will record the investment under the equity method ofaccounting.Note: Enter debits before credits.DateJuly 12, 2021D E FRecord entryGeneral JournalClear entryDebitCreditView general journal

Equity method of accounting investment is used when the ownership is more than 20% .Equity Method of…

Answered: Rossow purchased 1,900 shares of Reimer…

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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Following is a list of investments owned by Martinez Ltd., as of the company’s year-end, December 31, 2020: Investment No. Shares Cost Fair Value HFX Corporation 1,200 $9.00 $8.20 FDY Ltd. 2,100 6.50 6.55 CTN Corporation 3,700 7.00 7.60 On January 15, 2021, Martinez sold the shares in CTN Corporation for $8.10 per share. Prepare the journal entries required to record the sale, assuming the company uses the fair value through other comprehensive income without recycling method. (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 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 15, 2021 (To adjust to current fair value) (To record the sale of shares) (Reclassification…
On March 31, 2021, Chow Brothers, Inc., bought 8% of KT Manufacturing’s capital stock for $51.5 million. KT’s net income for the year ended December 31, 2021, was $80.5 million. The fair value of the shares held by Chow was $36.0 million at December 31, 2021. KT did not declare or pay a dividend during 2021. Required:1. Prepare all appropriate journal entries related to the investment during 2021.2. Assume that Chow sold the stock on January 20, 2022, for $30.5 million. Prepare the journal entries to record the sale.
On March 31, 2021, Chow Brothers, Inc., bought 10% of KT Manufacturing’s capital stock for $50 million. KT’s net income for the year ended December 31, 2021, was $80 million. The fair value of the shares held by Chow was $35 million at December 31, 2021. KT did not declare or pay a dividend during 2021.Required:1. Prepare all appropriate journal entries related to the investment during 2021.2. Assume that Chow sold the stock on January 20, 2022, for $30 million. Prepare the journal entry Chow would use to record the sale.
An investor company purchased 17,000 of the 50,000 outstanding shares of the investee company's common stock for $338,000 on January 1, 2021. During 2021, the investee company declared dividends of $33,000 and reported earnings for the year of $158,000. If the investor company uses the equity method of accounting for its investment in the investee company, it should report Dividend Revenue from the investee for 2021 in the amount of $_______. (If there is no Dividend Revenue, then enter 0. Do not round your answer for any part of the computation.)
An investor company purchased 121,000 of the 250,000 outstanding shares of the investee company's common stock for $79,000 on January 1, 2021. During 2021, the investee company declared and paid dividends of $55,000 and reported earnings for the year of $355,000. If the investor company uses the equity method of accounting for its investment in the investee company, its Equity Investment in the investee company account at December 31, 2021 should be $____________. (Do not round your answer for any part of the computation.)
An investor company purchased 60,000 of the 500,000 outstanding shares of the investee company's common stock on January 1, 2021. During 2021, the investee company reported earnings for the year of $459,000, and declared and paid an $0.52 per share cash dividend during 2021. If the investor company uses the fair value method of accounting for its investment in the investee company, it should report Dividend Revenue from the investee for 2021 in the amount of $_______. (If there is no Dividend Revenue, then enter 0. Do not round your answer for any part of the computation.)
An investor company purchased 42,000 of the 100,000 outstanding shares of the investee company's common stock for $382,000 on January 1, 2021. During 2021, the investee company declared dividends of $47,000 and reported earnings for the year of $194,000. If the investor company uses the equity method of accounting for its investment in the investee company, its Equity Investment in the investee company account at December 31, 2021 should be $____________. (Do not round your answer for any part of the computation.)
Blanco Company purchased 200 of the 1,000 outstanding shares of Darby Company's common stock for $600,000 on January 2, 2021. During 2021, Darby Company declared dividends of $100,000 and reported earnings for the year of $400,000. If Blanco Company used the fair value method of accounting for its investment in Darby Company, its Equity Investments (Darby) account on December 31, 2021 should be: a. $580,000 b. $660,000 c. $600,000 d. $680,000 If Blanco Company uses the equity method of accounting for its investment in Darby Company, its Equity Investments (Darby) account at December 31, 2021 should be: a. $580,000 b. $600,000 c. $660,000 d. $680,000
On January 1, 2022, Wayne Corporation acquired 55,000 common shares of Garth Company for $30 each. At the time, Garth had 687,500 common shares outstanding. The investment was classified as FV-NI. During 2022, Garth reported net income of $800,000 and did not declare or pay dividends. At the end of 2022, the fair value of Garth’s shares was $35 per share. REQUIRED: Prepare Wayne Corporation’s journal entries for the investment in Garth for the 2022 fiscal year. Please don't give image based answer..thanku
Required Information [The following information applies to the questions displayed below.] On April 10, 2019, Amelia Inc. purchased 475 shares of its own common stock in the market for $23 per share. On September 28, 2019, the company sold 285 of these shares in the open market at a price of $26 per share. Required: a. Use the horizontal model to show the effects on Amelia Inc.'s financial statements of the purchase of the treasury stock on April 10. 2019. Indicate the financial statement effect. (Enter decreases with a minus sign to Indicate a negative financial statement effect.) Assets Assets Balance Sheet Liabilities = + Cash b. Use the horizontal model to show the effects on Amelia Inc.'s financial statements of the sale of the treasury stock on September 28. 2019. Indicate the financial statement effect. (Enter decreases with a minus sign to Indicate a negative financial statement effect.) Balance Sheet Liabilities Stockholders' Equity Stockholders' Equity Net Income |E Net…
Required Information [The following information applies to the questions displayed below.] On April 10, 2019, Amelia Inc. purchased 475 shares of its own common stock in the market for $23 per share. On September 28, 2019, the company sold 285 of these shares in the open market at a price of $26 per share. Required: a. Use the horizontal model to show the effects on Amelia Inc.'s financial statements of the purchase of the treasury stock on April 10. 2019. Indicate the financial statement effect. (Enter decreases with a minus sign to Indicate a negative financial statement effect.) Assets = Assets = Balance Sheet Liabilities + + Balance Sheet Liabilities b. Use the horizontal model to show the effects on Amelia Inc.'s financial statements of the sale of the treasury stock on September 28. 2019. Indicate the financial statement effect. (Enter decreases with a minus sign to Indicate a negative financial statement effect.) + Stockholders' Equity + Net Income Stockholders' Equity Net…
Oriole Company purchased 300 of the 1000 outstanding shares of Sheffield Company's common stock for $680000 on January 2, 2021. During 2021, Sheffield Company declared dividends of $70000 and reported earnings for the year of $400000.If Oriole Company uses the equity method of accounting for its investment in Sheffield Company, its Equity Investments (Sheffield) account at December 31, 2021 should be $680000. $779000. $800000. $659000.

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