1

On January 1, 2019, Easton Corporation acquired 30% of the outstanding common shares of Feeley Corporation...

Question

On January 1, 2019, Easton Corporation acquired 30% of the outstanding common shares of Feeley Corporation...

On January 1, 2019, Easton Corporation acquired 30% of the outstanding common shares of Feeley Corporation for $140,000, purchased 25% of the outstanding common shares of Holmes Company for $82,500, and obtained significant influence in both situations. On this date, the financial statements of Feeley and Holmes disclosed the following information: 1 Feeley Holmes 2 Current assets $190,000.00 $140,000.00 3 Long-term assets 370,000.00 180,000.00 4 $560,000.00 $320,000.00 5 Liabilities $120,000.00 $90,000.00 6 Common stock (no par) 200,000.00 150,000.00 7 Retained earnings 240,000.00 80,000.00 8 $560,000.00 $320,000.00 During 2019, Feeley reported a loss of $70,000 and paid dividends of $40,000; Holmes reported income of $45,000 and paid dividends of $28,000. On January 1, 2020, Easton sold all the Holmes shares for $90,000. Assume Easton records both investments under the equity method and considers that any difference between each purchase price and the respective book value of the net assets acquired is goodwill. Required: Prepare journal entries to record (1) the purchase of the Feeley and Holmes shares, (2) the recognition of investment income, (3) the receipt of investee dividends, and (4) the sale of the Holmes shares.

Answers

journal entries Date Explanation Debit Credit 2019 1-Jan Equity investment in Feeley corporation $ 140,000 Cash $ 140,000 Bought 30% of common stock ] 1-Jan Equity investment in Holmes $82,500 cash $82,500 [ Bought 25% of common stock ] 31-Dec Loss from equity investment $21,000 Equity investment in Feeley corporation $21,000 [ recorded share of loss in Feeley corp] 70,000 x 30% 31-Dec Cash $12,000 Equity investment in Feeley corporation $12,000 To record share of dividend ] 40,000 x 30% 31-Dec Equity Investment in Holmes $11,250 Income from equity investment $11,250 [ to record share ofincome ] 45,000 x 25%31-Dec Cash $7,000 Equity investment in holmes $7,000 28,000 x 25% 2020 1-Jan Cash $ 90,000 gain on sale of equity investment Equity investment in holmes $3,250 $86,750 Book value of equity investment in holmes 82,500+11,250 -7,000 86,750


Similar Solved Questions

1 answers
A young man spent 1/4 of his allowance on a movie
A young man spent 1/4 of his allowance on a movie. He spent 11/18 of the remainder on after-school snacks. Then from the money remaining, he spent $3.00 on a magazine, which left him 1/24 of his original allowance to put into savings. How much of his allowance did he save?...
1 answers
Microeconomics Chapter 4: Consumer and Producer Surplus Flashcards | Quizlet is backward bending. Question 7 0.2...
Microeconomics Chapter 4: Consumer and Producer Surplus Flashcards | Quizlet is backward bending. Question 7 0.2 Refer to the accompanying table to answer the following questions Price of Erasers $.50 $1.00 $1.50 $2.00 $2.50 Quantity Demanded of Erasers Quantity Demanded of Pencils 12 10 8 7 6 10 Th...
1 answers
Maricopa's Success scholarship fund receives a gift of $130000. The money is invested in stocks, bonds,...
Maricopa's Success scholarship fund receives a gift of $130000. The money is invested in stocks, bonds, and CDs. CDs pay 2.75 % interest, bonds pay 2.4 % interest, and stocks pay 7.1 % interest. Maricopa Success invests $75000 more in bonds than in CDs. If the annual income from the investments ...
1 answers
Shown below are the expected sales for ABC Company: Sales on Account $118,000 $146,000 Sales for...
Shown below are the expected sales for ABC Company: Sales on Account $118,000 $146,000 Sales for Cash $22,000 $19,000 January February $133,000 $127,000 $26,000 March $21,000 April On average, 65% of the sales on account are collected in the month of sale, 27% are collected in the month following sa...
1 answers
Hint: In part (b), convert the sinusoids into​ the form with the smallest common period (it...
Hint: In part (b), convert the sinusoids into​ the form with the smallest common period (it is the fundamental period of x(n)), and then represent each sinusoid in terms of complex exponentials (harmonics) with this period Determine and sketch the magnitude and phase spectra of the following ...
1 answers
How much larger is Saturn compared to Earth? How is this calculated?
How much larger is Saturn compared to Earth? How is this calculated?...
1 answers
What is meant by the term sales mix? What assumption is usually made concerning sales mix...
What is meant by the term sales mix? What assumption is usually made concerning sales mix in CVP analysis? PLEASE BE VERY DETAILED :)...
1 answers
Question 15 Use thegrea sample data to test the claim that I <p2 Use a significance...
Question 15 Use thegrea sample data to test the claim that I <p2 Use a significance level ofoto The test statistie was called to bez-241 and the p-values 0000 What decision can you ? Anect the lettere seg Resist that the value For the thing Falect the hypothes-lasthan Question 16 Test the indicat...
1 answers
The demand for a good is P=200-5Q. The supply is P=50+10Q. What is the total wealth...
The demand for a good is P=200-5Q. The supply is P=50+10Q. What is the total wealth in the market?...
1 answers
What is GPA?
What is GPA?...
1 answers
4. What functional groups are present in the molecules that gave rise to the following IR...
4. What functional groups are present in the molecules that gave rise to the following IR Spectra? 0.8 O0.6 4 0.2 0.0 3000 2000 Wavenumber (cm-1) 1000 NIST Chemistry WebBook (http://webbook.nist.gov/chemistry) INFRARED SPECTRUM 0.8 2 0.6 0.4 0.2 3000 2000 1000 Wavenumber (cm-1) NIST Chemistry WebBoo...
1 answers
1. For each of the following regular expressions find a language (i.e., a set of strings)...
1. For each of the following regular expressions find a language (i.e., a set of strings) over A = {a,b,c} that can be represented/described by that expression. (6 points) a. bac + bc b. b*ac + bc C. b*ccca* a. 2. Find a regular expression to describe the given language: {b, ac, bac, bc, ..., b&rdqu...
1 answers
14 Question (7 points) e See page 897 Draw the curved arrow mechanism for the formation...
14 Question (7 points) e See page 897 Draw the curved arrow mechanism for the formation of an acetal from acidic methanol and pentan-2-one in the fewest steps. When given the choice, draw the arrows that lead to the resonance structures with full octets around each atom other than hydrogen. Do not s...
1 answers
Problem 1 Figure I using KVLKCL or Node Voltage Method. Wirite and Balance PBE.. Solve a...
Problem 1 Figure I using KVLKCL or Node Voltage Method. Wirite and Balance PBE.. Solve a circuit given in 20 ORA 20 Figure 1...
1 answers
Answer by True or false for the following question: 1- The most common cause of epilepsy is genetics. 2- Types of mening...
Answer by True or false for the following question: 1- The most common cause of epilepsy is genetics. 2- Types of meningitis include bacterial, viral, and anemic....
1 answers
For both problems below use straight line and double declining balance(Chapter 9) 4-A- Consider the following...
For both problems below use straight line and double declining balance(Chapter 9) 4-A- Consider the following data on an asset Cost of the asset is 132,000 Useful life 5 years Salvage value 20,000 4-B- consider the following data Cost of the asset $ 50,000 Useful life 7yewars Salvage value $50...
1 answers
Critical Values for the Correlation Coefficient n alpha = .05 alpha = .01 4 0.95 0.99...
Critical Values for the Correlation Coefficient n alpha = .05 alpha = .01 4 0.95 0.99 5 0.878 0.959 6 0.811 0.917 7 0.754 0.875 8 0.707 0.834 9 0.666 0.798 10 0.632 0.765 11 0.602 0.735 12 0.576 0.708 13 0.553 0.684 14 0.532 0.661 15...
1 answers
A social psychologist is interested in knowing whether the experience of attending preschool is related to...
A social psychologist is interested in knowing whether the experience of attending preschool is related to subsequent sociability. She identifies two groups of first graders, those who attended preschool and those who had not. Based on observations in the classroom and playground each student is ass...

-- 0.013881--