Question
On January 4, 20Y6, Spandella Company purchased 159,600 shares of Filington Company directly from one of the founders for a price of $25 per share.
On January 4, 20Y6, Spandella Company purchased 159,600 shares of Filington Company directly from one of the founders for a price of $25 per share. Filington has 570,000 shares outstanding, including the Spandella shares. On July 2, 20Y6, Filington paid $729,000 in total dividends to its shareholders. On December 31, 20Y6, Filington reported a net income of $1,002,000 for the year. Spandella uses the equity method in accounting for its investment in Filington.
| A. | Journalize the Spandella Inc. entries for the transactions involving its investment in Filington Company during 20Y6. Refer to the Chart of Accounts for exact wording of account titles. |
| B. | Determine the December 31, 20Y6, balance of the investment in Filington Company stock account. |
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Cost Accounting A Managerial Emphasis
Authors: Srikant M. Datar, Madhav V. Rajan, Charles T. Horngren, Louis Beaubien, Chris Graham
7th Canadian Edition
133138445, 978-0133926330, 133926338, 978-0133138443
