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Chapter4_5exercise

Chapter4_5exercise - $ Comprehensive income Dividends...

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1/1/2003 Purchase investment in XYZ Inc. for $10,000. Classified as available for sale 12/31/2003 Fair value of XYZ is $12,500, Net income is $75,000 and no other equity activity 12/31/2004 Fair value of XYZ is $9,000, Net income is $100,000 and there is a dividend of $10,000 declared. NOTE Tax Rate in all years is 30% I PREPARE THE JOURNAL ENTRIES REQUIRED ON 1/1/03, 12/31/03 & 12/31/04 II COMPLETE THE STATEMENT OF S. EQUITY Accumulated Comprehensive Retained Other Comp. Common Total Income Earnings Income Stock APIC Equity Balance at 12/31/02 1,000,000 - 500,000 9,500,000 11,000,000 Net income Unrealized gain/ loss on available for sale securities net of tax of $_______ Comprehensive income Balance at 12/31/03 Net income Unrealized gain/ loss on available for sale securities net of tax of
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Unformatted text preview: $________ Comprehensive income Dividends Balance at 12/31/04 SOLUTION: Accumulated Comprehensive Retained Other Comp. Common Total Income Earnings Income Stock APIC Equity Balance at 12/31/02 1,000,000 - 500,000 9,500,000 11,000,000 Net income 75,000 75,000 75,000 - Unrealized gain/ loss on available for sale securities 1,750 1,750 1,750 Comprehensive income 76,750 Balance at 12/31/03 1,075,000 1,750 500,000 9,500,000 ## 11,076,750 Net income 100,000 100,000 100,000 - Unrealized gain/ loss on available for sale securities net of tax of $1,050__ (2,450) (2,450) (2,450)- Comprehensive income 97,550 Dividends (10,000) (10,000) Balance at 12/31/04 1,165,000 (700) 500,000 9,500,000 ## 11,164,300 net of tax of $_750_...
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  • Winter '08
  • anderson
  • Generally Accepted Accounting Principles, XYZ Inc., income Unrealized gain/, Net income Unrealized, Unrealized gain/ loss

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