1 Partially correct Mark 0.67 out of 1.00 Flag question BOOK Equity Method Investment with Intercompany Sales The Coca-Cola Company owns 28 percent of the voting stock of Coca-Cola FEMSA, acquired at book value. Assume that Coca-Cola FEMSA reports income of $5 million for 2022. Coca-Cola FEMSA regularly sells canned beverages to Coca-Cola at a markup of 35 percent on cost. During 2022 Coca-Cola FEMSA's sales to Coca-Cola totaled $25 million. Coca-Cola's January 1, 2022, inventories include $1,350,000 purchased from Coca-Cola FEMSA Coca-Cola's December 31, 2022, inventories include $1,215,000 purchased from Coca-Cola FEMSA Required Prepare the 2022 journal entry on Coca-Cola's books to recognize its income from Coca-Cola FEMSA under the equity method. General Journal Description Debit Credit Investment in Coca-Cola FEMSA 148,723 x Equity in net income of Coca-Cola FEMSA 148,723 x Question 2 Partially correct Mark 0.94 out of 1.001 Merger Flag question Organic Juices, Inc. acquires Healthy Snax Corporation for $90 million in cash, in a merger. Healthy Snax's balance sheet at the date of acquisition is as follows (in millions Current labilities $12 Current assets $10 Plant and equipment 65 Intangible assets Total assets Long-term debt 36 Capital stock 18 Retained earnings 24 Treasury stock (10) S80 Total liabilities and equity 580 A consulting firm values Healthy Snax's plant and equipment at $25 million and its reported intangibles at $20 million. Due to declining interest rates, long-term debt has a fair value of $40 million. There are no unreported identifiable intangibles, and all other assets and liabilities are reported at amounts approximating fair value Required Prepare the journal entry Organic Juices makes to record its acquisition of Healthy Snax Enter answers in millions. Required Prepare the journal entry Organic Juices makes to record its acquisition of Healthy Snax. Enter answers in millions. General Journal Description Debit Credit Current assets 10 Plant and equipment 25 Intangible assets 20 Goodwill 270 x 0 Current liabilities Long-term debt Cash 12 0~ 40-> 00 90