KA Nitro Corporation purchased an 80% interest in Mars Company on January 1, 20X5, The following...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
KA Nitro Corporation purchased an 80% interest in Mars Company on January 1, 20X5, The following determination and distribution of excess schedule was prepared on the purchase date: Price paid for investment in Mars Less book value of interest purchased: Common stock Paid in capital in excess of par Retained earnings Total stockholder's equity Ownership interest Excess of cost over book Adjustments: Equipment (80%x$20,000) (8-year amortization, $2,000 per year) Dr. Goodwill Total adjustments Income Dividends Event 20X5 To record investment in Mars Company Subsidiary income of $45,000 reported to parent Dividends of $12,000 paid by Mars 20X6 Subsidiary income of $52,000 reported to parent Income and dividends for Mars Company dur20X5 and 20X6 were as follows: 20X6 $52,000 18,000 Investment in Mars Company Cash Investment in Mars Company Subsidiary income $24,000 41,600 93,400 $159,000 Cash Investment in Mars Company 80% Instructions: 1.Complete the following entries on the books of Mars Company under each of the methods indicated. Investment in Mars Company Subsidiary income $160,000 20X5 $45,000 12,000 127,200 $32.800 $16,000 16.000 Dr. $32.800 (A) (B) Sophisticated Simple Equity Method Equity Method (C) Cost Method KA Nitro Corporation purchased an 80% interest in Mars Company on January 1, 20X5, The following determination and distribution of excess schedule was prepared on the purchase date: Price paid for investment in Mars Less book value of interest purchased: Common stock Paid in capital in excess of par Retained earnings Total stockholder's equity Ownership interest Excess of cost over book Adjustments: Equipment (80%x$20,000) (8-year amortization, $2,000 per year) Dr. Goodwill Total adjustments Income Dividends Event 20X5 To record investment in Mars Company Subsidiary income of $45,000 reported to parent Dividends of $12,000 paid by Mars 20X6 Subsidiary income of $52,000 reported to parent Income and dividends for Mars Company dur20X5 and 20X6 were as follows: 20X6 $52,000 18,000 Investment in Mars Company Cash Investment in Mars Company Subsidiary income $24,000 41,600 93,400 $159,000 Cash Investment in Mars Company 80% Instructions: 1.Complete the following entries on the books of Mars Company under each of the methods indicated. Investment in Mars Company Subsidiary income $160,000 20X5 $45,000 12,000 127,200 $32.800 $16,000 16.000 Dr. $32.800 (A) (B) Sophisticated Simple Equity Method Equity Method (C) Cost Method
Expert Answer:
Answer rating: 100% (QA)
SOLUTION A Simple Equity Method 20X5 To record investment in Mars Company Investment in Mars Company 127200 Cash 127200 Subsidiary income of 45000 reported to parent Investment in Mars Company 45000 S... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-0538480284
11th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Posted Date:
Students also viewed these accounting questions
-
On January 1, 2018, Hester Co. sells machinery to Beck Corp. at its fair value of $720,000 and leases it back. The machinery had a carrying value of $631,800, the lease is for 10 years and the...
-
The following determination and distribution of excess schedule is prepared on January 1, 2012, the date on which Parker Company purchases a 60% interest in Share Company: On December 31, 2013,...
-
The researcher would like to test the hypothesis that the average monthly wage for recent college graduates is less than $2000. A random sample of 19 recent college graduates averaged $1900 per month...
-
Apply Theorem 3 to calculate the matrix exponential e At for each of the matrices in Problems 35 through 40. A = 13 3 3 3 01 3 3 00 23 0002
-
An aircraft aileron can be modeled as a first order system where p depends on the aircraft. Obtain a family of step responses for the aileron system in the feedback configuration shown in Figure...
-
In Example 3, change the exponent from 6 to 5. Data from Example 3 Using the binomial formula, expand (2x + 3) 6 . In using the binomial formula for (2x + 3) 6 , we use 2x for a, 3 for b, and 6 for...
-
Estimate the energy required for an average person (see Fig. 9.32) to run a mile in 4 minutes in still standard air. Compare your estimate if you instead modeled the person as a cylinder \(6...
-
Medical billing errors and fraud are on the rise. According to the MBAA website, 8 out of 10 times, the medical bills that you get are not right. (Source: Accurate Medical Billing, bit.ly/1lHKIu3,...
-
Suppose the Jenson's alpha of a portfolio is 2.5%, while the actual return is 12%. The risk-free rate is 2.5% and the expected return on the market is 12%. What is the Treynor Ratio of the portfolio?
-
This program currently fails to compile. Modify TripleMin() so that item1 can be of a different type than item2 and item3. #include <iostream> using namespace std; template<typename...
-
Rich Skywark is the owner of Skywark Hardware and Electric, a family owned business, in the College Station, Pennsylvania, area. His business consists of over-the-counter retail sales and discounted...
-
During a lockout, a. no work can be done legally. b. strikebreakers are prevented from entering company property. c. a neutral third party helps two sides come to an agreement. d. workers are...
-
Which feature best describes a PERT chart? a. It creates a time line of production tasks. b. It creates a work flow for production equipment. c. It identifies the critical path of tasks in a project....
-
What is own-account transportation?
-
What logistics services do you think ports should provide?
-
You are considering opening a pizza restaurant in your town. Describe the production process that you envision taking place to deliver a fully cooked pizza to a customer. What components would be in...
-
David consumes two things: gasoline (9) and bread (92). David's utility function is 0.5 0.5 U(91, 92)=409192 Let the price of gasoline be p, the price of bread be p2, and income be Y. Derive David's...
-
Grace is training to be an airplane pilot and must complete five days of flying training in October with at least one day of rest between trainings. How many ways can Grace schedule her flying...
-
Custom Brand Bakeries, Inc. (CBBI), located in Erie, Pennsylvania, bakes a variety of products for various parties on a contract basis. For example, a food company may contract with CBBI to make...
-
What is the source of the 13 basic governmental accounting principles, and what benefit is there to studying these principles?
-
Assume that a U.S. company has a foreign subsidiary whose functional currency is the U.S. dollar. Explain how exchange rates between the foreign currency and the dollar would have to change in order...
-
Describe the nature and significance of the biology plus approach to establishing parental rights for unwed fathers.
-
Identify and describe the three primary ways of establishing legal parentage.
-
Identify the three parties with the strongest interests in parentage determinations and describe the nature of those interests.
Study smarter with the SolutionInn App