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spin [16.1K]
4 years ago
9

Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2017, for $188,000 and appropriately accounted for the inve

stment using the fair-value method. On January 1, 2018, Milani purchased an additional 30 percent of Seida for $637,000 which resulted in significant influence over Seida. On that date, the fair value of Seida's common stock was $2,000,000 in total. Seida's January 1, 2018 book value equaled $1,850,000, although land was undervalued by $135,000. Any additional excess fair value over Seida's book value was attributable to a trademark with an 8-year remaining life. During 2018, Seida reported income of $308,000 and declared and paid dividends of $108,000. Prepare the 2018 journal entries for Milani related to its investment in Seida.
Business
1 answer:
IRISSAK [1]4 years ago
8 0

Answer:

<u>Purchase entry:</u>

Seida Investment   600,000

Trademark                37,000

            Cash                          637,0000

<u>Net Income Entry:</u>

Seida Investment 123,200

          Gain on investment   123,200

<u>Dividends Entry:</u>

cash   43,200

  Seida Investment 123,200

Explanation:

current investment fair value: 2,000,000 x 40% = 800,000

previous value in books:    2,000,000 x 10% =      (200,000)

adjustment on Sieda investment:                            600,000

Purchase for                                                              637,000

TradeMark                                                                   37,000

Milani participation in the income: 308,000 x 40% = 123,200

Milani participation in the dividends: 108,000 x 40% =   43,200

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Acme company has just completed the incorporation process and received its articles of incorporation from the state. at the firs
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3 years ago
Dave and his friend Stewart each owns 50 percent of KBS. During the year, Dave receives $75,000
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Answer: $12717

Explanation:

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2. As an S Corporation will be:

= 7.65% × $75000

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As an effective leader, it is necessary to constantly monitor the work and the relationship between employees, in which case it is necessary to understand the reason for Marshall's behavior and try to change the parameters and procedures that may be facilitating this behavior. It is necessary for him to understand that despite being an effective worker, the company is an integrated system that must be in perfect synchronicity for it to be successful in the market.

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