Data from construction corporations financial

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: er 31, 2013, under the equity method of accounting for investments. On January 2, 2013, MBH Inc. acquired 30% of the voting common stock of Construction Corporation as a long-term investment. Data from Construction Corporation's financial statements for the year ended December 31, 2013, include the following: Required: 163.Compute the amount that would be reported for the investment on American Corporation's financial statements at December 31, 2013. On January 1, 2013, American Corporation purchased 25% of the outstanding voting shares of Short Supplies common stock for $210,000 cash. On that date, Short's book value and fair value were both $840,000. The equity method is deemed appropriate for this investment. Short's net income reported on December 31, 2013, was $80,000. During 2013, Short also paid cash dividends in the amount of $24,000. Required: 164.Prepare the journal entries necessary to record the above information on American Corporation's books during 2013. On January 1, 2013, American Corporation purchased 25% of the outstanding voting shares of Short Supplies common stock for $210,000 cash. On that date, Short's book value and fair value were both $840,000. The equity method is deemed appropriate for this investment. Short's net income reported on December 31, 2013, was $80,000. During 2013, Short also paid cash dividends in the amount of $24,000. Required: 165.How should Silverwood report the above information in its year-end income statement and balance sheet? Discuss the rationale for your answer. On July 1, 2013, Silverwood Company purchased for cash 35% of the voting common stock of Yellowstone Corporation. Both companies have a December 31 fiscal year-end. Yellowstone Corporation, which is publicly traded on an organized stock exchange, reported its net income for the year to Silverwood and paid a dividend to Silverwood during the year. Required: 166.(1.) Prepare the necessary entries for 2013 under the equity method (other than for the purchase)....
View Full Document

Ask a homework question - tutors are online