1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
elena55 [62]
3 years ago
11

On March 31, 2021, Chow Brothers, Inc., bought 8% of KT Manufacturing’s capital stock for $51.5 million. KT’s net income for the

year ended December 31, 2021, was $80.5 million. The fair value of the shares held by Chow was $36.0 million at December 31, 2021. KT did not declare or pay a dividend during 2021.
Required:
a. Prepare all appropriate journal entries related to the investment during 2021.
b. Assume that Chow sold the stock on January 20, 2022, for $30.5 million. Prepare the journal entries to record the sale.
Business
1 answer:
In-s [12.5K]3 years ago
4 0

Answer and Explanation:

a. The Journal entries are shown below:-

Investment - Capital stock Dr, $51.5 million

         To Cash $51.5 million

(Being investment is recorded)

Unrealized holding gain or loss Dr, $15.5 million ($51.5 - $36.0)

         To Fair value adjustment $15.5 million

(Being fair value adjustment is recorded)

b. Unrealized holding gain or loss Dr, $5.5 million ($51.5 - $30.5 - $15.5)

        To Fair value adjustment $5.5 million

(Being fair value adjustment before sale is recorded)

Cash Dr, $30.5 million

Unrealized holding gain or loss Dr, $21 million

           To Investment - Capital stock $51.5 million

(Being sale of investment is recorded)

You might be interested in
Describe an advertisement you've seen that uses a desire based marketing message. What desire does this ad appeal to? (2-4 sente
igomit [66]

<span>1.</span><span>I once saw an advertisement for a weight loss supplement. The persons in the ad seemed to change significantly after using the product. Apart from their appearance, everything seemed to be going better for them.</span>

6 0
3 years ago
Read 2 more answers
What is the first thing you should do when a customer requests a sale item once you’ve determined that item is out of stock? Tel
ipn [44]

Answer:

Tell the customer when you store’s next delivery day is and to come back then Issue the customer a raincheck for the item that is out of stock

Explanation:

Customer<em> retention</em> is important as well as <em>meeting their specific needs</em>. It is unwise to turn back a customer and refer them to a competitor, this may mean loss of business (currently and in the future). Also it is unwise to offer a substitute item as this will not meet their needs (though you may want to inform them of the substitute item if they are interested).  Issue the customer a raincheck for the item that is out of stock is the best way to go and keep the business.

7 0
2 years ago
Farmer Company purchased equipment on January 1, Year 1 for $82,000. The equipment is estimated to have a 5-year life and a salv
timurjin [86]

Answer:

15600 , 13600

Explanation:

Annual Depreciation =  [Cost of Asset - Salvage Value] / Expected use years

Year 1 Beginning : Cost = $82000 , Salvage Value = $4000, Years = 5

So, Annual Depreciation = [82000 - 4000] / 5

= 78000 / 5 = 15600

Year 4 Beginning : {3 Years gone, 2 years left}

Asset Value remaining = Cost - [(Annual Depreciation)(Years)]

= 82000 - [(15600)(3)]

= 82000 - 46800 = 35200

Dep. = [Cost - Scrap Value] / Years

= [35200 - 8000] / 2

= 27200/2  = 13600

7 0
3 years ago
_____ provide funds to small businesses with high growth potential in exchange for a share of ownership in the company.
posledela
Venture capitalists provide funds to small businesses, especially young ones, with a good amount of growth potential. They tend to get a decent share of ownership in the company in exchange of the investment that they made, and can serve as a very important support for the small business.
4 0
2 years ago
A(n) ____ goal for a waste management plant could be to "identify barriers to recycling as well as means to overcome those barri
OleMash [197]

Answer:

Tactical.

Explanation:

Strategic goals are utilized to characterize tactical goals, which demonstrate the particular accomplishment destinations of every office and division in the organization. The most profitable tactical goals will lead straightforwardly to the achievement of strategic goals.

7 0
3 years ago
Other questions:
  • Bricktan Inc. makes three products, basic, classic, and deluxe. The maximum Bricktan can sell is 130,000 units of basic, 508,000
    5·1 answer
  • Operating assets include cash, accounts receivable, and inventory but not any depreciable fixed assets.
    8·1 answer
  • Some companies want to get their products into as many outlets as possible, understanding that the more exposure a product gets,
    7·2 answers
  • When working with international firms, u.s. businesses: select one:
    14·1 answer
  • Johnson, Inc. has just ended the calendar year making a sale in the amount of $10,000 of merchandise purchased during the year a
    6·1 answer
  • The advent of containerization has:
    15·1 answer
  • In capitalism what does competition do for consumers?
    10·2 answers
  • When Maricela looked in her closet and said, "I don't have anything to wear to the party this weekend," she seems to be in which
    7·1 answer
  • Prepare general journal entries to record these transactions using the following titles: Cash (101); Accounts Receivable (106);
    15·1 answer
  • Do you think that you could successfully negotiate a fair price for a car? If yes,
    11·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!