Problem 4-1

On January 1, 2011, Perelli Company purchased 90,000 of the 100,000 outstanding shares of common stock of Singer Company as a long-term investment. The purchase price of $4,943,000 was paid in cash. At the purchase date, the balance sheet of Singer Company included the following:

Current assets		$2,919,100
Long-term assets		3,882,800
Other assets		765,700
Current liabilities		1,550,300
Common stock, $20 par value		2,014,800
Other contributed capital		1,805,000
Retained earnings		1,626,700

Additional data on Singer Company for the four years following the purchase are:

		2011		2012		2013			2014
Net income (loss)		$2,014,200		$475,200		($180,100	)		($323,900	)
Cash dividends paid, 12/30		501,000		501,000		501,000			501,000

Prepare journal entries under each of the following methods to record the purchase and all investment-related subsequent events on the books of Perelli Company for the four years, assuming that any excess of purchase price over equity acquired was attributable solely to an excess of market over book values of depreciable assets (with a remaining life of 15 years). (Assume straight-line depreciation.)

***JUST NEED ANSWER TO C***

CES Prepare journal entries under each of the following methods to record the purchase and all investment-related s over book values of depreciable assets (with a remaining life of 15 years). (Assume straight-line depreciation.) (a) Your answer is correct. Perelli uses the cost method to account for its investment in Singer. (Credit account titles are automatically in Date Account Titles and Explanation Debit Credit 2011 Investment in Subsidiary 4,943,000 Study. Cash (To record the investment) 4,943,000 Cash 450,900 Dividend Income (To record dividend income) 450,900 2012 Cash 450,900 Dividend Income 450,900 2013 TCash 450,900 Dividend Income 450,900 2014 T Cash 450,900 Dividend Income 434,160 Investment in Subsidiai 16,740 SHOW LIST OF ACCOUNTS LINK TO TEXT Your answer is correct. Perelli uses the partial equity method to account for its investment in Singer. (Credit account titles are automatically ina 2011 investment in Subsidiary 4.943.000 4.943.000 Type here to search Help System Announcements Debit Date Account Titles and Explanation CES Credit 2011 Investment in Subsidiary 4,943,000 4,943,000 Cash (To record the investment) Cash 450,900 450,900 Investment in Subsidiai (To record dividend income) Investment in Subsidiary 1,812,780 Study. 1,812,780 Equity in Subsidiary Inc (To record equity income (loss)) 2012 Cash 450,900 450,900 Investment in Subsidiai (To record dividend income) Investment in Subsidiary 427,680 Equity in Subsidiary Inc (To record equity income (loss)) 427,680 2013 Cash 450,900 Investment in Subsidiai (To record dividend income) 450,900 Equity in Subsidiary Incom 162,090 Investment in Subsidiai (To record equity income (loss)) 162,090 2014 Cash 450,900 Investment in Subsidiai (To record dividend income) 450,900 Equity in Subsidiary Incom 291,510 Investment in Subsidian (To record equity income (loss)) 291,510 SHOW LIST OF ACCOUNTS LINK TO TEXT Type here to search o BF cise 5-3 cise 5-4 Perelli uses the complete equity method to account for its investment in Singer. (Round answers to decimal places, e.g. Score Results by Study Ive Date Account Titles and Explanation Debit Credit 2011 (To record the investment) (To record dividend income) (To record equity income (loss)) (To record amortization) 2012 (To record dividend income) (To record equity income (loss)) (To record amortization) 2013 (To record dividend income) (To record equity income (loss)) (To record amortization) 2014 To record dividend income) To bord oration) SHOW LIST OF ACCOUNT 1 O Type here to search o