RR Company purchased 12,000 common shares of SS Inc. on January 1, Year 1 for $198,000....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
RR Company purchased 12,000 common shares of SS Inc. on January 1, Year 1 for $198,000. SS inc. had 80,000 common shares outstanding. The following information relates to SS Inc.: Net Income (loss) $300,000 S(180,000) Dividends paid $75,000 $40,000 Market value/share at December 31 $17.25 $18.30 Year 1 Year 2 On January 1, Year 3, RR sold Investment in SS Inc. shares for $20 per share. i) Prepare the journal entries for years 1, 2 and on January 1, year 3 assuming the following independent scenarios: a) Investor plans to sell the shares in the short term for profit b) Elect to use FVTOCI (include closing journal entry on January 1 Year 3) c) Investor has significant influence ii) How much is the total change in Retained Earnings from January 1, Year 1 to January 1, Year 3 for each scenario? Show all #s for each year to support your total change RR Company purchased 12,000 common shares of SS Inc. on January 1, Year 1 for $198,000. SS inc. had 80,000 common shares outstanding. The following information relates to SS Inc.: Net Income (loss) $300,000 S(180,000) Dividends paid $75,000 $40,000 Market value/share at December 31 $17.25 $18.30 Year 1 Year 2 On January 1, Year 3, RR sold Investment in SS Inc. shares for $20 per share. i) Prepare the journal entries for years 1, 2 and on January 1, year 3 assuming the following independent scenarios: a) Investor plans to sell the shares in the short term for profit b) Elect to use FVTOCI (include closing journal entry on January 1 Year 3) c) Investor has significant influence ii) How much is the total change in Retained Earnings from January 1, Year 1 to January 1, Year 3 for each scenario? Show all #s for each year to support your total change
Expert Answer:
Answer rating: 100% (QA)
Scenario 1 Year 1 Jan 1 Investment AC Bank AC Dr 198000 Cr ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
Posted Date:
Students also viewed these accounting questions
-
The following information relates to two companies, designated Company A and Company B. One of the companies is a traditional steel manufacturer. The other is a successful Internet retailer. Using...
-
The following information relates to Simrin plc for the year ended 31 December 20X0: Simrin plc had 100,000 ordinary shares of £1 each in issue throughout the year. Simrin plc has in issue...
-
The following information relates to Perry Somers financial affairs in 20X1: 1. Somer is employed as a salesman and is remunerated by commissions. He must pay all of his own expenses. During 20X1, he...
-
1. Was the contract between Joel King and Barber bilateral or unilateral? 2. What was bargained for and given in exchange by each party? Mark P. Painter, Judge This case involves neighbors and the...
-
What is the difference between renewable and nonrenewable resources?
-
Explain why the following accounts are being adjusted in the following entries: a. Prepaid rent d. Salary payable b. Unearned service revenue e. Accumulated depreciation c. Supplies
-
Can the success of a merger be judged by comparing the market performance of the new entity with that of the reference index?
-
Gordon Company records invoices at gross in its voucher system. From the following transaction, (a) Record in general journal form the appropriate entries at gross (b) Record the entries as if Gordon...
-
compute interest and find the maturity date for the following notes. (Use 360 days for calculation.) Date of Note Principal Interest Rate (%) Terms Interest Maturity Date (a) June 10 $111,600 8% 60...
-
Quack Concepts produces its patented drug Metafour (a duck extract used as an antioxidant) in both Hong Kong and the United States. The effective marginal tax rate is 35 percent in the United States...
-
A company reported $237,110 of profit for 2020. It also declared $36,000 of dividends on preferred shares for the same year. At the beginning of 2020, the company had 52,000 outstanding common...
-
1. If you invest $2,500 in a high-yield savings account with a 7.52% annual interest rate (compounded quarterly)... a) (2 points) What will the account's balance be in 6 years? b) (2 points) How long...
-
Write about one of the following service-based organizations: Cirque du Soleil Ten Spa TD Bank Shaw Cable Goals: Explain each of the elements of the extended marketing mix. Describe the relationship...
-
Currently South Africa is facing energy production crisis, if you were to advice government and Eskom to get out of this crisis, what advice would you give them? 7.The National Energy Regulator of...
-
Accountants can report on compliance with laws and regulations in conjunction with an audit engagement or as a separate engagement. What is the difference in the objective of reporting on compliance...
-
A) Use a fixed-point iteration method to determine a solution accurate to within 102 for x-3x-3=0 on [1, 2]. Use po = 1. B) Use the Bisection method for e = 10 find the approximate value of 3.
-
E6-29 (Supplement 6B) Recording Purchases and Sales Using Perpetual and Periodic Inventory Systems Kangaroo Jim Company reported beginning inventory of 100 units at a per unit cost of $25. It had the...
-
The unadjusted trial balance of Secretarial Services is as follows: SECRETARIAL SERVICES Unadjusted Trial Balance as at 31 December 2017 Account Debit Credit Cash at bank Office supplies Prepaid...
-
On January 1, Issuing Company issued $50,000 in debt securities. The stated interest rate on the debt securities is 8%, with interest payable semiannually, on June 30 and December 31. On February 1,...
-
What is a bill-and-hold arrangement? Under what circumstances may a seller recognize revenue before shipment on a bill-and-hold arrangement?
-
Distinguish between a pension settlement and a pension curtailment.
-
Carl William, Inc. is a conservatively managed boat company whose motto is, The old ways are the good ways. Management has always used straight-line depreciation for tax and external reporting...
-
Assume the same facts as given in P12-31, except that management intends to use double-declining balance depreciation with a switch to straight-line depreciation (applied to any undepreciated...
-
Fritz Gilgen is evaluating a proposal to purchase a new processor that would cost \($180,000\) and have a salvage value of \($18,000\) in five years. Fritzs cost of capital is 14 percent. It would...
Study smarter with the SolutionInn App