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1 - On January 2 , 2 0 2 4 , Sanborn Tobacco Incorporated bought 5 % of Jackson Industry s capital stock for $

1- On January 2,2024, Sanborn Tobacco Incorporated bought 5% of Jackson Industrys capital stock for $96 million. Jackson Industrys net income for the year ended December 31,2024, was $126 million. The fair value of the shares held by Sanborn was $110 million at December 31,2024. During 2024, Jackson declared a dividend of $66 million.
Part 1
Required:
1. Prepare all appropriate journal entries related to the investment during 2024.
A. Record the purchase of Jackson Industry capital stock for $96 million.
B. Record Sanborn Tobacco's portion of Jackson Industry's net income of $126 million.
C. Record the dividend revenue.
D. Record the fair value adjustment.
On January 2,2024, Sanborn Tobacco Incorporated bought 5% of Jackson Industrys capital stock for $96 million. Jackson Industrys net income for the year ended December 31,2024, was $126 million. The fair value of the shares held by Sanborn was $110 million at December 31,2024. During 2024, Jackson declared a dividend of $66 million. Exercise 12-16(Algo) Part 22. Assume that Sanborn sold the stock on January 2,2025 for $122 million. Prepare the journal entries Sanborn would use to record the sale.
PART 2
A- Record the entry to adjust to fair value on the date of sale.
B- Record the sale of stock on January 2,2025 for $122 million.
2- The following information applies to the questions displayed below.]
The accounting records of Jamaican Importers, Incorporated, at January 1,2024, included the following:
Assets:
Investment in IBM common shares $ 1,995,000
Less: Fair value adjustment (210,000)
$ 1,785,000
No changes occurred during 2024 in the investment portfolio
Required:
Prepare appropriate adjusting entry(s) at December 31,2024, assuming the fair value of the IBM common shares was $1,359,000.
A- Record the fair value adjustment assuming the fair value of the IBM common shares was $1,359,000.
B- Record the fair value adjustment assuming the fair value of the IBM common shares was $1,810,000.
C- Record the fair value adjustment assuming the fair value of the IBM common shares was $2,010,000.
3- As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Incorporated's 490,000 shares for $570,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMCs net assets were equal. During the year, AMC earned net income of $340,000 and distributed cash dividends of 20 cents per share. At year-end, the fair value of the shares is $604,000. Exercise 12-19(Algo) Part 1 Required: 1. Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.
A- Record the purchase of AMC Supplies shares for $570,000 as a long-term investment.
B- Record Painters' Equipment's share of AMC Supplies' $340,000 net income.
C- Record the cash dividend of 20 cents per share.
D- Record any necessary year-end adjusting journal entry when the fair value of the shares held are $604,000.
As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Incorporated's 490,000 shares for $570,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMCs net assets were equal. During the year, AMC earned net income of $340,000 and distributed cash dividends of 20 cents per share. At year-end, the fair value of the shares is $604,000. Exercise 12-19(Algo) Part 22. Assume significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.
PART 2
A- Record the purchase of AMC Supplies shares for $570,000 as a long-term investment.
B- Record Painters' Equipment's share of AMC Supplies' $340,000 net income.
C- Record the cash dividend of 20 cents per share.
D- Record any necessary year-end adjusting journal entry when the fair value of the shares held are $604,000 at year-end.

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