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MAVERICK [17]
3 years ago
9

On January 2, 2020, Pull Corp. paid $516,000 for 24% (96,000 shares) of the outstanding common stock of Olivia Co. Pull used the

equity method to account for the investment. At the end of 2020, the balance in the investment account was $820,000. On January 2, 2021, Pull sold 20,000 shares of Olivia stock for $12 per share. For 2021, Oliver reported income of $188,000 and paid dividends of $30,000. Required: (A.) Prepare the journal entry to record the sale of the 20,000 shares. (B.) After the sale has been recorded, what is the balance in the investment account
Business
1 answer:
cestrela7 [59]3 years ago
6 0

Answer:

(a). Journal entry shown below:

(b). Balance in the investment account = $649,167

Explanation:

As per the data given in the question,

A)

Journal entry to record the sale of the 20,000 shares:

Cash A/c Dr. $240,000

(20,000×$12)

Loss on sale of investment A/c Dr. -$69,166.67

($170,833-$240,000)

To Investment in Olivia co. A/c $170,833

($820,000÷96,000×20,000 shares)

(To record the sale of 20,000 shares)

B)

Balance in the investment account in Jan 1 2020 = $820,000

Investment in Oliver Co. sold = $170,833

Balance in the investment account after the sale = $820,000-$170,833

=$649,167

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On April 1, the company retained an attorney for a flat monthly fee of $2,000. Payment for April legal services was made by the
olga55 [171]

Answer:

                                       Journal Entries

Date         Account Titles and Explanation      Debit       Credit

April 30   Salaries expenses                             $4,800

                 ($12,000/5) * 2

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                  (To record the Accrual of salaries expense)

May 30      Salaries Expenses

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                   Salaries payable                              $4,800

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6 0
3 years ago
2.3 The Ledger and Posting
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The net change in the Cash account balance from these three transactions is $30,000

What is the company's net change in cash account balance?

The net change in company's cash balance is the excess of its cash inflows from sources minus its cash outflows from all sources, in other words, the net change in cash balance from the three transactions is the funds raised long-term debt issuance and the amounts paid for equipment and raw materials

net change in cash balance=$200,000-$150,000-$20,000

net change in cash balance=$30,000

Find out more cash flow statement on:brainly.com/question/14942025

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8 0
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We sign two new customers out of every seven people with whom we speak. Our goal is to sign 120 new customers. How many people w
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420 is what I got. if you do two divided by 120 it gives you 60 then 60 times 7 is 420.
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