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On December 12, 2021, an equity investment costing $80,000 was sold for $100,000. The investment was carried in the balance sheet at $75,000, and was accounted for under the equity method. An error wa...
See AnswerQ: Fizer Pharmaceutical paid $68 million on January 2, 2021,
Fizer Pharmaceutical paid $68 million on January 2, 2021, for 4 million shares of Carne Cosmetics common stock. The investment represents a 25% interest in the net assets of Carne and gave Fizer the a...
See AnswerQ: On January 1, 2021, Cameron Inc. bought 20%
On January 1, 2021, Cameron Inc. bought 20% of the outstanding common stock of Lake Construction Company for $300 million cash, giving Cameron the ability to exercise significant influence over Lake’s...
See AnswerQ: On July 1, 2021, Gupta Corporation bought 25% of
On July 1, 2021, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $100 million cash, giving Gupta the ability to exercise significant influence over VB’s operations. At t...
See AnswerQ: Tanner-UNF Corporation acquired as a long-term investment $
Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2021. Company management has the positive intent and ability to hold the bonds until maturi...
See AnswerQ: Colah Company purchased $1 million of Jackson, Inc., 5
Colah Company purchased $1 million of Jackson, Inc., 5% bonds at their face amount on July 1, 2021, with interest paid semi-annually. The bonds mature in 20 years but Colah planned to keep them for le...
See AnswerQ: As a long-term investment at the beginning of the 2021
As a long-term investment at the beginning of the 2021 fiscal year, Florists International purchased 30% of Nursery Supplies Inc.’s 8 million shares of capital stock for $56 million. The fair value an...
See AnswerQ: Edible Chemicals Corporation owns a $4 million whole life insurance policy
Edible Chemicals Corporation owns a $4 million whole life insurance policy on the life of its CEO, naming Edible Chemicals as beneficiary. The annual premiums are $70,000 and are payable at the beginn...
See AnswerQ: Refer to the situation described in BE 8–4. Prepare
Refer to the situation described in BE 8–4. Prepare the necessary journal entries assuming that VTC uses the net method to account for purchase discounts. Data from BE 8-4: On December 28, 2021, Vide...
See AnswerQ: Below are two unrelated situations relating to life insurance. Required
Below are two unrelated situations relating to life insurance. Required: Prepare the appropriate journal entry for each situation. 1. Ford Corporation owns a whole life insurance policy on the life of...
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