The beginning balance sheet of Noram Corporation included the following: Long-Term Investment in Rockaway Software (equity-method investment)..........
Question:
The beginning balance sheet of Noram Corporation included the following:
Long-Term Investment in Rockaway Software (equity-method investment).......... $612,000
Noram completed the following investment transactions during the year:
Mar 16 Purchase 1,400 shares of Canton, Inc., common stock as a long-term available-for-sale investment, paying $13.00 per share.
May 21 Received cash dividend of $1.75 per share on the Canton investment.
Aug 17 Received cash dividend of $86,000 from Rockaway Software.
Dec 31 Received annual reports from Rockaway Software, net income for the year was $520,000. Of this amount Noram’s proportion is 21%.
At year-end, the fair market values of Noram’s investments are: Canton, $26,600; Rockaway, $698,000.
Requirements
1. Record the transactions in the journal of Noram Corporation.
2. Post entries to the T-account for Long-Term Investment in Rockaway and determine its balance at December 31.
3. Show how to report the Long-Term Available-for-Sale Investments and the Long-Term Investment in Rockaway accounts on Noram’s balance sheet at December 31.
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Step by Step Answer:
Req 1 Journal DATE ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT Mar 16 LongTerm Investments 140...View the full answer
Financial accounting
ISBN: 978-0136108863
8th Edition
Authors: Walter T. Harrison, Charles T. Horngren, William Bill Thomas
