Question

Accounting For Equity Investments The beginning balance sheet of Waterfall Source Co. included a $400,000 investment...

Accounting For Equity Investments The beginning balance sheet of Waterfall Source Co. included a $400,000 investment in Evan stock (20% ownership, Waterfall has a significant influence over Evan). During the year, Waterfall Source Co. completed the following investment transactions:

Mar. 3: Purchased 4,000 shares at $11 per share of Lili Software common stock as a long-term equity investment, representing 7% ownership, no significant influence.

Mar. 15: Received a cash dividend of $0.61 per share on the Lili investment.

Dec.15: Received a cash dividend of $70,000 from Evan investment.

Dec. 31: Received Evan's annual report showing $300,000 of net income.

Dec.31: Received Lili's annual report showing $120,000 of net income for the year.

Dec31: Evan's stock fair value at year-end was $390,000.

Dec.31: Lili's common stock fair value at year-end was $12 per share.

Requirements:

Requirement 1.) Journalize the transactions for the year of Waterfall Source.

Requirement 2.)Post transactions to T-accounts to determine the December 31, 2018, balances related to the investment and the investment income accounts.

Requirement 3.) Prepare Waterfall Source's partial balance sheet at December 31, 2018 from your answers in Requirement 2.

Requirement 4.) Where is the unrealized holding gain or loss associated with Lili stock reported?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
jan Purchased 500 shares of Velcon stock, paying $41 per share. The investment represents 45% ownership...
jan Purchased 500 shares of Velcon stock, paying $41 per share. The investment represents 45% ownership in Velcon's voting stock and Know All has significant influence over Velcon. Know All intends to hold the investment for the indefinite future. Aug. 22 Received a cash dividend of $0.76 per share on the Velcon stock. Dec. 31 Velcon's current market value is $38 per share. 31 Velcon reported net income of $350,000 for the year ended 2018. Requirements 1. Journalize Know All's...
Kampus Corporation had the following eight investment transactions or events: Jan 1    Purchased Argon Co....
Kampus Corporation had the following eight investment transactions or events: Jan 1    Purchased Argon Co. bonds for $10,000 cash. (Purchase is considered a short-term investment in available-for-sale (AFS) debt securities.) Jan 3    Purchased 1,200 shares of Elmer, Inc. for $36,000 cash. (Purchase is considered a long-term stock investment with insignificant influence.) Mar 31    Received cash dividend of $0.25 per share from Elmer, Inc. Jun 1    Purchased 5,000 shares of Logan, Inc. for $60 per share. These...
StampStamp Company completed these​ long-term equity investment transactions during 2018​. .1. Journalize StampStamp ​Company's investment transactions....
StampStamp Company completed these​ long-term equity investment transactions during 2018​. .1. Journalize StampStamp ​Company's investment transactions. Explanations are not required. ​(Record debits​ first, then credits. Exclude explanations from any journal​ entries.)Apr​ 10: Purchased 300 shares of RoboticsRobotics stock​ (less than 15​% of RoboticsRobotics​'s outstanding​ stock), paying ​$23 per share. StampStamp Company intends to hold the investment indefinitely. Journal Entry Date Accounts Debit Credit Apr 10 Jul​ 22: Received a cash dividend of ​$1.26 per share on the RoboticsRobotics stock. Journal...
an. 14 Purchased 200 shares of Robotic stock, paying $ 52 per share. The investment represents...
an. 14 Purchased 200 shares of Robotic stock, paying $ 52 per share. The investment represents 3 %((that's what the book says)) ownership in Robotic's voting stock. Dollar Bill does not have significant influence over Robotic. Dollar Bill intends to hold the investment for the indefinite future. Aug. 22 Received a cash dividend of $ 0.44 per share on the Robotic stock. Dec. 31 Adjusted the investment to its current market value of $ 47 per share. 31 Robotic reported...
Problem 15-4A Accounting for long-term investments in securities; with and without significant influence LO P3, P4...
Problem 15-4A Accounting for long-term investments in securities; with and without significant influence LO P3, P4 [The following information applies to the questions displayed below.] Selk Steel Co., which began operations on January 4, 2017, had the following subsequent transactions and events in its long-term investments. 2017 Jan. 5 Selk purchased 50,000 shares (25% of total) of Kildaire's common stock for $1,000,000. Oct. 23 Kildaire declared and paid a cash dividend of $4.30 per share. Dec. 31 Kildaire's net income...
P12-3A Journalize transactions and adjusting entry for stock investments. On December 31, 2015, Turnball Associates owned...
P12-3A Journalize transactions and adjusting entry for stock investments. On December 31, 2015, Turnball Associates owned the following securities, held as a long-term investment. The securities are not held for influence or control of the investee. Common Stock Shares Cost Gehring Co. 2,000 $60,000 Wooderson Co. 5,000 45,000 Kitselton Co. 1,500 30,000 On December 31, 2015, the total fair value of the securities was equal to its cost. In 2016, the following transactions occurred. July 1 Received $1 per share...
Accounting for Equity Securities—Influential The Dunn Company had the following transactions and adjustment related to a...
Accounting for Equity Securities—Influential The Dunn Company had the following transactions and adjustment related to a stock investment: 2016 Jan. 15 Purchased 12,000 shares of Van, Inc.’s common stock at $10 per share plus a brokerage commission of $900. These shares represent a 30 percent ownership of Van’s common stock. Dec. 31 Received a cash dividend of $2.25 per share of common stock from Van. Dec. 31 Made the adjusting entry to reflect income from the Van stock investment. Van’s...
Stewart Corporation's balance sheet at December 31, 2016, showed the following:    Short-term investments, at fair...
Stewart Corporation's balance sheet at December 31, 2016, showed the following:    Short-term investments, at fair value               $40,000 Stewart Corporation's trading portfolio of stock investments consisted of the following at December 31, 2016:        Stock       Number of Shares   Cost      Conn Common Stock   200   $28,000    Hall Common Stock   300   9,000            $37,000 During 2017, the following transactions took place:    Feb.   5   Sold 100 shares of Conn common stock for $18,000.   ...
1. The balance in the Unrealized Gain or Loss—Equity account will appear on the balance sheet...
1. The balance in the Unrealized Gain or Loss—Equity account will appear on the balance sheet as a contra asset. appear as a deduction in the stockholders’ equity section. appear on the income statement under Other Expenses and Losses. not be shown on the financial statements until the securities are sold. 2. enek Corporation had the following transactions pertaining to debt investments. Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record...
The shareholders’ equity section of the balance sheet of ABC Inc. included the following accounts at...
The shareholders’ equity section of the balance sheet of ABC Inc. included the following accounts at December 31, 2017 Shareholders’ Equity ($ in millions) Common stock, 240 million shares at $1 par $ 240 Paid-in capital—excess of par 1,680 Paid-in capital—share repurchase 1 Retained earnings 1,100 In subsequent years, ABC reacquired shares of its common stock and later sold shares in two separate transactions. ABC consider the repurchased shares as retired shares: On February 5, 2018, ABC purchased 6 million...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT