Accounting Assume an investor company purchases all of the stock of the investee company in a stock purchase for $900 on 1/1/2022. The investee's balance sheet on the date of purchase is as follows: Accounts receivable $75 Mortgage payable $75 Inventories $150 Building $600 Stockholders' equity $750 Total assets $825 Total liabilities and equity $825 Assume the additional purchase price relates to the b uilding value not reported on investee company's balance sheet. The building held by the investee has a remaining useful life of 10 years on the acquisition date and depreciated based on the straight-line method. Also assume, subsequent to the purchase, the investee reports net income of $150 and pays $45 in dividends to the investor during 2022. Required: Provide all necessary journal entries related to this investment for the investor company using the equity method during 2022
Accounting Assume an investor company purchases all of the stock of the investee company in a stock purchase for $900 on 1/1/2022. The investee's balance sheet on the date of purchase is as follows: Accounts receivable $75 Mortgage payable $75 Inventories $150 Building $600 Stockholders' equity $750 Total assets $825 Total liabilities and equity $825 Assume the additional purchase price relates to the b uilding value not reported on investee company's balance sheet. The building held by the investee has a remaining useful life of 10 years on the acquisition date and depreciated based on the straight-line method. Also assume, subsequent to the purchase, the investee reports net income of $150 and pays $45 in dividends to the investor during 2022. Required: Provide all necessary journal entries related to this investment for the investor company using the equity method during 2022
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 1MC
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