Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 2014, XYZ Company purchased 10,000 shares of the stock of Rayco, and did obtain significant influence. The investment is intended as a

On January 1, 2014, XYZ Company purchased 10,000 shares of the stock of Rayco, and did obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $96,000, and represents a 32% ownership stake. In 2014, Rayco made net income of $30,000 and paid dividends of $12,000. The price of Rayco's stock increased from $11.50 per share at the beginning of the year to $12.50 per share at the end of the year.

a. Prepare the January 1 and December 31 general journals entries for XYZ Company. (please show all calculations)

b. How much should the XYZ Company report of the balance sheet for the investment in Rayco as the end of 2014. (Please show calculation)

a. General Journal Entries:
Date Account Debit Credit
Jan. 1
Dec. 31
Dec. 31
b. Stock Investments Accounts Balance 12/31/14: >>>>>>>

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Lean Auditing Driving Added Value And Efficiency In Internal Audit

Authors: James C. Paterson

1st Edition

1118896882, 978-1118896884

More Books

Students also viewed these Accounting questions

Question

Draw a picture consisting parts of monocot leaf

Answered: 1 week ago