Question

KPMG purchased 15% of the stock of RSM for $100,000. During 2019 RSM reported net income...

KPMG purchased 15% of the stock of RSM for $100,000. During 2019 RSM reported net income of $500,000. Additionally, RSM paid a total dividend of $50,000 to all shareholders. On 8/1/19, KPMG sold half of its stock in RSM for $140,000. What is the value of KPMG’s investment in RSM as of 12/31/18?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Investment in RSM 15% $1,00,000
Dividends paid to all shareholders of RSM 100%           5,00,000
Dividend Paid to KPMG 15%              75,000
The total value of the investment $1,00,000
* Since the dividend income is in the nature of revenue and will be credited to the Profit and Loss Account.
On 1/8/2019 sold half of the investment $50,000
Capital Gain = Sale value - Book value of the Investment
Capital Gain = $140,000 - $50,000
$90,000
Therefore, KPMG's investment in RSM as on 31/12/2019 $50,000
Therefore, KPMG's investment in RSM as on 31/12/2018 $1,00,000
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
On 1/1/19, Major Company purchased 10% of Minor Company's common stock for $100,000. Minor's book value...
On 1/1/19, Major Company purchased 10% of Minor Company's common stock for $100,000. Minor's book value of equity at that date consisted of $200,000 common stock and $450,000 retained earnings. On 1/1/19, the difference between the fair value and book value of equity of Minor's stock is attributable to land for $100,000 and the remaining difference is attributable to equipment. The equipment has a 10 year remaining life at 1/1/19.   During 2019, Minor reported income of $150,000 and paid dividends...
For the fiscal year ended December 31, 2019, a company reported Net Income of $7,000,000. The...
For the fiscal year ended December 31, 2019, a company reported Net Income of $7,000,000. The Dillie company had 3,000,000 shares of $1 par value common stock outstanding all year. In addition, the company had $500,000 par value of 10% cumulative, non-convertible preferred stock outstanding all year. In December 2019, the company declared and paid a preferred dividend of $50,000, as well as a $0.10 per share dividend to common shareholders. Furthermore, on January 1, 2019 the company issued at...
Please answer These questions 18) Blue Sky Company reported net income of $520,000 for the year...
Please answer These questions 18) Blue Sky Company reported net income of $520,000 for the year ended 12/31/21. Included in the computation of net income were: amortization of a patent, $40,000; income from an investment in common stock of Grape Inc., accounted for under the equity method, $62,000; and amortization of a bond discount, $17,000. Blue Sky also paid a $50,000 dividend during the year. The net cash provided (used) by operating activities would be reported at ______ 19) XYZ,...
7. On January 2, 2018, Howdy Doody Corporation purchased 10% of Ranger Corporation's common stock for...
7. On January 2, 2018, Howdy Doody Corporation purchased 10% of Ranger Corporation's common stock for $60,000. Ranger's net income for the years ended December 31, 2018 and 2019, were $50,000 and $100,000, respectively. During 2018, Ranger declared and paid a dividend of $50,000. There were no dividends in 2019. On December 31, 2018, the fair value of the Ranger stock owned by Howdy Doody had increased to $80,000. How much should Howdy Doody show in the 2018 income statement...
On 1/1/2019 Company XXX purchased 30% of shares of YYY Company for $ 250,000. On this...
On 1/1/2019 Company XXX purchased 30% of shares of YYY Company for $ 250,000. On this date, YYY had stockholders’ equity of $ 500,000. The book values of YYY’s net assets approximated their fair values, except for land, which had fair value exceeding its book value by $ 200,000, and inventory, which had book value exceeding its fair value by $ 10,000 (all sold in 2019). In 2019, YYY reported net income of $ 100,000 and paid $ 20,000 in...
On 1/1/2019 Company XXX purchased 30% of shares of YYY Company for $ 250,000. On this...
On 1/1/2019 Company XXX purchased 30% of shares of YYY Company for $ 250,000. On this date, YYY had stockholders’ equity of $ 500,000. The book values of YYY’s net assets approximated their fair values, except for land, which had fair value exceeding its book value by $ 200,000, and inventory, which had book value exceeding its fair value by $ 10,000 (all sold in 2019). In 2019, YYY reported net income of $ 100,000 and paid $ 20,000 in...
1. Hilton Company reported net income of $50,000 for the year. During the year, accounts receivable...
1. Hilton Company reported net income of $50,000 for the year. During the year, accounts receivable decreased by $15,000, accounts payable decreased by $2,000 and depreciation expense for the year of $9,000 was recorded. Net cash provided by operating activities for the year is: 2.  Land costing $75,000 was sold for $115,000 cash. The gain on the sale was reported on the income statement as other income. In addition, a building worth $400,000 was acquired by borrowing the money on a...
HLL Group reported net income totaling $3,000,000 for the year 2019. The following is additional information...
HLL Group reported net income totaling $3,000,000 for the year 2019. The following is additional information obtained from the HLL Group’s financial reports: The Company purchased 100,000 shares of Micron Specialists for $10 per share during the fourth quarter of 2019. The investment is accounted for as “available for sale.” The value of the shares is $9 at the end of 2019. The Company purchased 10,000 shares of Sunswept Properties for $20 per share during the fourth quarter of 2019....
1)Beta reported $6,000,000 in net income for the current year. The company had $500,000 of 10%...
1)Beta reported $6,000,000 in net income for the current year. The company had $500,000 of 10% non-convertible preferred stock outstanding all year and $5,000,000 of 6% convertible bonds outstanding all year. Assuming the convertible bonds are dilutive, determine the numerator of both basic and diluted EPS when the tax rate is 40%. 2)On February 4, 2016, Investor purchased 15% of Investee common stock for $62,000. Investee’s net income for the years ended December 31 2016 and 2017 were $18,000 and...
Yellow Company reported net income of $520,000 for the year ended 12/31/21. Included in the computation...
Yellow Company reported net income of $520,000 for the year ended 12/31/21. Included in the computation of net income were: depreciation expense, $85,000; amortization of a patent, $40,000; income from an investment in common stock of XYZ Inc., accounted for under the equity method, $62,000; and amortization of a bond discount, $17,000. Yellow also paid an $60,000 dividend during the year. The net cash provided (used) by operating activities would be reported at ______
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT
Active Questions
  • Nursing Care of Patient with Peptic Ulcer Disease Abstract: Cedric Filmore, age 40, is transferred to...
    asked 4 minutes ago
  • describe the three fiscal policy tools at the government's disposal to stimulate or contract the economy....
    asked 27 minutes ago
  • i) Write the condensed electron configurations for the following ions: (a) Ca+ (b) S2- (c) V2+...
    asked 27 minutes ago
  • In Java a function can call itself(we may explore more about this later in the course).  This...
    asked 40 minutes ago
  • Write a short program,Java, that implements the Caesar substitution cipher with k=3. That is, each letter...
    asked 42 minutes ago
  • Design a function named findMax that accepts two integer values as arguments and returns the value...
    asked 48 minutes ago
  • In MIPS, I am trying to create an array of 7 words that can either be...
    asked 49 minutes ago
  • Cash, $2,000 Accounts Receivable, $1,250 Professional Equipment, $10,200 Office Equipment, $5,500 Accounts Payable, $3,500 P. Palmer,...
    asked 50 minutes ago
  • Add two more statements to main() to test inputs 3 and -1. Use print statements similar...
    asked 51 minutes ago
  • C++ program called that reads a string and check if it’s well-formed or not. ex== The...
    asked 1 hour ago
  • 1: Describe five functions of nonverbal communication. (Creating and maintaining relationships, Regulating Interaction, Influencing others, Concealing/deceiving,...
    asked 1 hour ago
  • Trucks that travel on highways have to stop at various locations to be weighed and inspected...
    asked 1 hour ago