! Required information [The following information applies to the questions displayed below.] As a long-term investment, Fair Company purchased 20% of Midlin Company's 160,000 shares for $192,000 at the beginning of the reporting year of both companies. During the year, Midlin earned net income of $121,000 and distributed cash dividends of $0.20 per share. At year-end, the fair value of the shares is $200,000. 2. Assume significant influence was acquired. How will the investment in Midlin Company be reflected in the balance sheet and income statement of Fair Company at year-end? Balance Sheet (Partial) Income Statement (Partial)
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- As a long-term investment at the beginning of the current fiscal year, Company A purchased 30% of Company B's 20 million shares for $60 million. The fair value and book value of the shares were the same at that time. During the year, Company B earned net income of $70 million and distributed cash dividends of $2.00 per share. At the end of the year, the fair value of the shares is $56 million. Required: Prepare the appropriate journal entries from the purchase through the end of the year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions, (i.e., 10,000,000 should be entered as 10). View transaction list Journal entry worksheet < 1 2 3 Record the investor's share of net income. Note: Enter debits before credits. Transactions 2 General Journal Debit Credit Investment in equity affiliate 21 Retained earnings 21 Record entry Clear entry View general journalhelp meAs a long-term investment, Fair Company purchased 20% of Midlin Company’s 120,000 shares for $144,000 at the beginning of the reporting year of both companies. During the year, Midlin earned net income of $117,000 and distributed cash dividends of $0.30 per share. At year-end, the fair value of the shares is $150,000. Required: 1. Assume no significant influence was acquired. Record the transactions from the purchase through the end of the year, including any adjustment for the investment’s fair value, if appropriate.
- [The following information applies to the questions displayed below.]As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 520,000 shares for $600,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC’s net assets were equal. During the year, AMC earned net income of $370,000 and distributed cash dividends of 25 cents per share. At year-end, the fair value of the shares is $637,000. Required:1. Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a)Record the purchase of AMC Supplies shares for $600,000 as a long-term investment. b)Record Painters' Equipment's share of AMC Supplies' $370,000 net income. c) Record the cash dividend of 25 cents per share. d)Record any necessary year-end…As a long-term investment at the beginning of the 2018 fiscal year, Florists International purchased 30% of Nursery Supplies Inc.’s 8 million shares for $56 million. The fair value and book value of the shares were the same atthat time. During the year, Nursery Supplies earned net income of $40 million and distributed cash dividends of$1.25 per share. At the end of the year, the fair value of the shares is $52 million.Required:Prepare the appropriate journal entries from the purchase through the end of the year.As a long-term investment at the beginning of the 2021 fiscal year, Florists International purchased 20% of Nursery Supplies Inc.'s 10 million shares for $70 million. The fair value and book value of the shares were the same at that time. During the year, Nursery Supplies earned net income of $45 million and distributed cash dividends of $1.00 per share. At the end of the year, the fair value of the shares is $66 million. Required:Prepare the appropriate journal entries from the purchase through the end of the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions, (i.e., 10,000,000 should be entered as 10).) 1. Record the investment in Nursery Supplies shares. 2.Record the investor's share of net income. 3. Record the cash dividends received from Nursery Supplies shares. 4.Record fair value adjustment at year-end.
- As a long-term investment at the beginning of the 2021 fiscal year, Florists International purchased 25% of Nursery Supplies Inc.'s 16 million shares for $74 million. The fair value and book value of the shares were the same at that time. During the year, Nursery Supplies earned net income of $32 million and distributed cash dividends of $1.50 per share. At the end of the year, the fair value of the shares is $70 million. Required:Prepare the appropriate journal entries from the purchase through the end of the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions, (i.e., 10,000,000 should be entered as 10).)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 for $56 million. The fair value and book value of the shares were the same at that time. During the year, Nursery Supplies earned net income of $40 million and distributed cash dividends of $1.25 per share. At the end of the year, the fair value of the shares is $52 million.Required:Prepare the appropriate journal entries from the purchase through the end of the year.As a long-term investment at the beginning of the 2024 fiscal year, Florists International purchased 25% of Nursery Supplies Incorporated's 16 million shares for $59 million. The fair value and book value of the shares were the same at that time. During the year, Nursery Supplies earned net income of $36 million and distributed cash dividends of $2.25 per share. At the end of the year, the fair value of the shares is $55 million. Required: Prepare the appropriate journal entries from the purchase through the end of the year.
- On July 1, 2021, JKJ Corporation purchased 100 common shares of JMK Ltd. at $20 per share. JKJ expected to be able to sell this investment within a year at $28 per share. Dividends of $1 per share were declared and paid on August 1, 2021. On December 31, 2021, the fair value of each share was $23. What balance was shown in the investment account on JKJ's balance sheet on December 31 (year end)? $2,300 $2,400 $2,000 $2,800As a long-term investment at the beginning of the fiscal year, Florists International purchased 30% of Nursery Supplies Inc.’s 8 million shares for $56 million. The fair value and book value of the shares were the same at that time. The company realizes that this investment typically would be accounted for under the equity method, but instead chooses the fair value option. During the year, Nursery Supplies earned net income of $40 million and distributed cash dividends of $1.25 per share. At the end of the year, the fair value of the shares is $52 million. Required: 1. Would this investment be classified on Florists’ balance sheet as held-to-maturity securities, trading securities, available-for-sale securities, significant-influence investments, or other? Explain. 2. Prepare all appropriate journal entries related to the investment during 2016. 3. Indicate the effect of this investment on 2016 income before taxes.Fairbanks Corporation purchased 400 ordinary shares of Sherman Inc. as a trading investment for $13,200. During the year, Sherman paid a cash dividend of $3.25 per share. At year-end, Sherman shares were selling for $34.50 per share. Prepare Fairbanks' journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. assume the shares were purchased to meet a non-trading regulatory requirement. Prepare Fairbanks' journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment.