Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 15, Problem 3PEB
To determine
Journalize the stock investment transactions for Company Y, under the equity method.
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On January 2, Cohan Company acquired 40% of the outstanding stock of Sanger Company for $677,000. For the year ended December 31, Sanger Company earned income of $149,000 and paid dividends of $27,500.
Prepare the entries for Cohan Company for the purchase of the stock, the share of Sanger income, and the dividends received from Sanger Company. Refer to the Chart of Accounts for exact wording of account titles.
On January 2, Cohan Company acquired 40% of the outstanding stock of Sanger Company for $677,000. For the year ended December 31, Sanger Company earned income of $149,000 and paid dividends of $27,500.
Prepare the entries for Cohan Company for the purchase of the stock, the share of Sanger income, and the dividends received from Sanger Company. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
Cohan Company
General Ledger
ASSETS
110
Cash
111
Petty Cash
120
Accounts Receivable
121
Allowance for Doubtful Accounts
131
Notes Receivable
132
Interest Receivable
141
Merchandise Inventory
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Office Supplies
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Investment in Sanger Company Stock
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Valuation Allowance for Trading Investments
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Valuation Allowance for Available-for-Sale Investments
181
Land
193
Office Equipment
194
Accumulated Depreciation-Office Equipment
LIABILITIES
210
Accounts Payable
221
Notes Payable
231
Interest…
On January 2, Todd Company acquired 40% of the outstanding stock of McGuire Company for $205,000. For the year ending December 31, McGuire earned income of $48,000 and paid dividends of $14,000.
Prepare the entries for Todd Company for the purchase of the stock, share of McGuire income, and dividends received from McGuire.
Chapter 15 Solutions
Financial Accounting
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