Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Simca Auto Manufacturing acquired a 30% interest in the outstanding stock of Wisconsin Engines, Inc. on December 31 , 2021. The purchase price was $3,100,000

image text in transcribed
image text in transcribed
Simca Auto Manufacturing acquired a 30% interest in the outstanding stock of Wisconsin Engines, Inc. on December 31 , 2021. The purchase price was $3,100,000 and amounted to 100,000 shares. During 2022, Wisconsin Engines paid just one dividend on June 30th of $1.65 per share. For the year ending December 31, 2022, Wisconsin Engines reported net income of $2,780,600. Its stock price December 31,2022 was $38 per share. Required Prepare all journal entries required by Simca Auto Manufacturing for the time period starting with December 31, 2021 and through the next year ending December 31, 2022 under situation a. and b. below: a. Cannot exercise significant control, and the securities are reported as "available for sale". b. Can exercise significant control. c. Under each of the methods used to account for the investment in Wisconsin Engines under a. and b. above, what would be the amount reported on Simca Auto Manufacturing's Balance Sheet related to the investment at December 31, 2022? In addition, what would be the total income reported on their Income Statement for the year ended December 31, 2022? Balance Sheet: Amount to be Reported as of December 31, 2022 a. Cannot Exercise Significant Control b. Can Exercise Significant Control Income Statement: Total Income to be Reported for Year Ending December 31, 2022 a. Cannot Exercise Significant Control b. Can Exercise Significant Control

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

More Books

Students also viewed these Accounting questions

Question

6. LO.2 Describe the tax formula for the AMT.

Answered: 1 week ago