Question
On January 1, 2020, New Technology Corporation invested in MSC Software (long-term equity method investment) for $619,000 to own 40% of MSC. New Technology completed
On January 1, 2020, New Technology Corporation invested in MSC Software (long-term equity method investment) for $619,000 to own 40% of MSC.
New Technology completed the following investment transactions during the year 2020:
Aug 17 Received cash dividend of $81,000 from MSC Software
Dec 31 Received annual report from MSC Software. Net income for the year was $550,000.
Of this amount, New Technologys proportion is 40%.
Requirements:
- Record the transactions in the journal of New Technology Corporation.
| Date | Accounts | Debit | Credit |
| January 1, 2020 |
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| August 17, 2020 |
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| December 31, 2020 |
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| Calculation: |
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- Whats the investment balance at December 31, 2020?
| Calculation: |
- If New Technology sold investment in MSC for $800,000 on this date, what would be the journal entry?
| Date | Accounts | Debit | Credit |
| December 31, 2020 |
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On January 1, 2020, New Technology Corporation invested in MSC Software (long-term equity method investment) for $619,000 to own 40% of MSC.
New Technology completed the following investment transactions during the year 2020:
Aug 17 Received cash dividend of $81,000 from MSC Software
Dec 31 Received annual report from MSC Software. Net income for the year was $550,000.
Of this amount, New Technologys proportion is 40%.
Requirements:
- Record the transactions in the journal of New Technology Corporation.
| Date | Accounts | Debit | Credit |
| January 1, 2020 |
|
|
|
|
|
|
|
|
| August 17, 2020 |
|
|
|
|
|
|
|
|
| December 31, 2020 |
|
|
|
|
|
|
|
|
|
| Calculation: |
|
|
- Whats the investment balance at December 31, 2020?
| Calculation: |
- If New Technology sold investment in MSC for $800,000 on this date, what would be the journal entry?
| Date | Accounts | Debit | Credit |
| December 31, 2020 |
|
|
|
|
|
|
|
|
|
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Financial Accounting
Authors: Charles Horngren, William Thomas, Walter Harrison, Greg Berberich, Catherine Seguin
5th Canadian edition
133472264, 978-0133446265, 133446263, 978-0133472264
