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Anuta_ua [19.1K]
3 years ago
8

Jackson Corporation owns 10% of the voting stock of Kettering Company and has been reporting it as an equity investment with no

significant influence. At the beginning of the current year, the investment has a fair value of $40,000,000. Jackson originally purchased its 10% interest for $30,000,000. Jackson purchases an additional 25% interest in Kettering's voting stock for $120,000,000, and determines that the equity method is now appropriate. Any basis difference is attributed to goodwill. Kettering reports net income of $800,000 for the current year, and declares and pays $100,000 in dividends. The year-end fair value of Jackson's 35% interest is $170,000,000. At what amount does Jackson report the investment on its balance sheet? A. $160,245,000 B. $160,280,000 C. $170,000,000 D. $150,245,000
Business
1 answer:
iris [78.8K]3 years ago
5 0

Answer:

<u>Under Equity Method </u>

Fair Value of Investment (10%) = $40,000,000

Add: Additional Purchase (25%) = $120,000,000

Add: Share of Profit (800,000 × 35%) = $280,000

Less: Share of Dividends (100,000 × 35%) = (35000)

Investment at the year end = $160,245,000

Thus, the correct answer is A, Which indicated that the Jackson report the investment on its balance sheet is $160,245,000.

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Scorpion4ik [409]

Answer:

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Issue common stock           Increase               NE                      Increase

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Sale of treasury stock         Increase              NE                        Increase  Declare cash dividend            NE                   Increase                   NE

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100% stock dividend              NE                        NE                      NE

2-for-1 stock split                    NE                       NE                         NE

When shares are sold or issued, they increase the stockholders equity as people buy these shares. They also increase assets because cash comes into the company when the shares are sold. This is why the Issuing of preference and common stock as well as the sale of Treasury shares had the same effects.

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100% stock dividend reduces retained earnings but increases equity so stockholders equity does not change.

8 0
2 years ago
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In the opening as the introduction is the place where introduce the problem, need, or opportunity that will address by the person, in a proposal.

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A proposal is a document that, technically speaking, tries to persuade the reader to adopt a plan or project that is being provided. For their operations to be successful and to land new contracts, the majority of firms rely on persuasive proposal writing.

A person can observe that a proposal frequently contains the following: a brief explanation of the problem, the suggested solution, the costs involved, and the benefits.

Thus, In the opening as the introduction is the place.

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brainly.com/question/1341280

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1 year ago
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6 0
3 years ago
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Answer:

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Then June's ending inventory = 125% × 700

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Answer:

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