On January 1, 2019, Hill Corporation acquired 40% of the outstanding common stock (400 of 1,000 outstanding
Question:
On January 1, 2019, Hill Corporation acquired 40% of the outstanding common stock (400 of 1,000 outstanding shares) of Valley Manufacturing Inc. for $60,000, which equals the book value of Valley. On December 31, 2019, Valley reported net income of $30,000 and declared and paid a cash dividend of $11,500.
Required:
1. Prepare the journal entries made by Hill to record the transactions related to its investment in Valley.
2. Give the title and amount of each item (except Cash) related to the investment on the December 31, 2019 balance sheet. Name the balance sheet section in which each item appears.
Common StockCommon stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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