Question
Question 4 The summarized balance sheets of Pharoah Company and Sheridan Company as of December 31, 2021 are as follows: Pharoah Company Balance Sheet December
Question 4
The summarized balance sheets of Pharoah Company and Sheridan Company as of December 31, 2021 are as follows:
| Pharoah Company Balance Sheet December 31, 2021 | |
| Assets | $2000000 |
| Liabilities | $220000 |
| Capital stock | 1000000 |
| Retained earnings | 780000 |
| Total equities | $2000000 |
| Sheridan Company Balance Sheet December 31, 2021 | |
| Assets | $1480000 |
| Liabilities | $330000 |
| Capital stock | 990000 |
| Retained earnings | 160000 |
| Total equities | $1480000 |
If Pharoah Company acquired a 20% interest in Sheridan Company on December 31, 2021 for $270000 and the fair value method of accounting for the investment were used, the amount of the debit to Equity Investments (Sheridan) would have been
|
| $230000. |
|
| $198000. |
|
| $270000. |
|
| $296000. |
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Practice Management With Auditing For Coders
Authors: Elsevier
1st Edition
0323482333, 978-0323482332
