2/activity question Seved 23 On 1 January 20X5, Zan Company purchased 5,000 of the 20,000 outstanding common shares of Woo Computer Corp. (WC) for $156,000 cash, Zan had significant influence as a result of the investment and will use the equity method to account for the Investment On 1 January 20X5, the statement of financial position of WC showed the following book valves (summarized 3 022004 Assets not subject to depreciation Assets subject to depreciation (et) Liabilities Connon shares Metained earnings $ 195,300 156,000 51,300 233,200 "Fair value. $221.500 difference relates to land **Fale value, 182.200, estimated remaining life. 5 years Assume there is no impairment of goodwill. Additional subsequent data on WC are as follows Cuch dividente declared and paid Fair value per share 20 UNG 51,000 $60,00 42,0 . $ 201 41 Required: 1. Provide the investor's entries or give the required information for of no entry is required for a transaction evento "No Journal entry required in the first account field) Entry ot die of acquisition Entries at 31 December 20X5 to recognize investoinent and dividende d. Entries at 31 December 20x6 to recogntre investment and dividends Journal entry worksheet 1 2 3 4 5 Record acquisition of investment. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general journal Dvd 23 1-2 Indicate the amount of goodwill purchased. Goodwill purchased 03:25:47 2. Are any eritries needed to recognize a writedown to fair value at the end of 2005 or 20x6? Yes O NO 3. Reconstruct the investment account, showing the opening and closing balances and all changes in the account Investment Account (Equity Method Acg. Bal 4-1. How much Investment revenue would be reported each year if the cost method was used? Investment revenue 20x5 20X6 42. What would be the balance in the Investment account? Balance in the investment account aw 1 o 0 here to search acer C 2 or . 2 S % 5 9 8 7 6. 4 2 3 E o U E W R G H LL D S M B N 2/activity question Seved 23 On 1 January 20X5, Zan Company purchased 5,000 of the 20,000 outstanding common shares of Woo Computer Corp. (WC) for $156,000 cash, Zan had significant influence as a result of the investment and will use the equity method to account for the Investment On 1 January 20X5, the statement of financial position of WC showed the following book valves (summarized 3 022004 Assets not subject to depreciation Assets subject to depreciation (et) Liabilities Connon shares Metained earnings $ 195,300 156,000 51,300 233,200 "Fair value. $221.500 difference relates to land **Fale value, 182.200, estimated remaining life. 5 years Assume there is no impairment of goodwill. Additional subsequent data on WC are as follows Cuch dividente declared and paid Fair value per share 20 UNG 51,000 $60,00 42,0 . $ 201 41 Required: 1. Provide the investor's entries or give the required information for of no entry is required for a transaction evento "No Journal entry required in the first account field) Entry ot die of acquisition Entries at 31 December 20X5 to recognize investoinent and dividende d. Entries at 31 December 20x6 to recogntre investment and dividends Journal entry worksheet 1 2 3 4 5 Record acquisition of investment. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general journal Dvd 23 1-2 Indicate the amount of goodwill purchased. Goodwill purchased 03:25:47 2. Are any eritries needed to recognize a writedown to fair value at the end of 2005 or 20x6? Yes O NO 3. Reconstruct the investment account, showing the opening and closing balances and all changes in the account Investment Account (Equity Method Acg. Bal 4-1. How much Investment revenue would be reported each year if the cost method was used? Investment revenue 20x5 20X6 42. What would be the balance in the Investment account? Balance in the investment account aw 1 o 0 here to search acer C 2 or . 2 S % 5 9 8 7 6. 4 2 3 E o U E W R G H LL D S M B N
