![jkenkw4667](/avatars/23325.jpg)
jkenkw4667
21.06.2020 •
Business
Listed below are a few events and transactions of Kim Company. Year 1 Jan. 2 Purchased 95,000 shares of Grey Co. common stock for $501,000 cash. Grey has 285,000 shares of common stock outstanding, and its activities will be significantly influenced by Kim. Sept. 1 Grey declared and paid a cash dividend of $2.00 per share. Dec. 31 Grey announced that net income for the year is $500,400. Year 2 June 1 Grey declared and paid a cash dividend of $2.00 per share. Dec. 31 Grey announced that net income for the year is $722,900. Dec. 31 Kim sold 10,000 shares of Grey for $126,500 cash. Prepare journal entries to record the above transactions and events of Kim Company. (Do not round intermediate calculations and round your final answers to the nearest dollar amount.)
Solved
Show answers
More tips
- B Business and Finance How to Create a Business Plan? Your Ultimate Guide...
- F Food and Cooking Deflope: What is it and how does it work?...
- F Food and Cooking Why Doesn t the Confirmation Link Come to Email?...
- F Food and Cooking How to Get Reconfirmation of Registration?...
- S Science and Technology Discovering the Anatomy of an LCD TV Screen...
- H Health and Medicine What You Need to Know About Nasal Congestion in Infants: Causes, Symptoms, and Treatment...
- A Auto and Moto What is the Average Lifespan of an Engine in a Car?...
- C Computers and Internet Make Money Online: Secrets and Essential Ways...
- A Auto and Moto How Can Parking Sensors Help Drivers?...
- S Style and Beauty How to Properly Apply Eye Makeup: Tips from a Professional Makeup Artist...
Answers on questions: Business
- B Business The resources used to produce goods and services are divided into three categories: land, labor (including the special category of entrepreneurship), and capital. A...
- B Business The Pet Store experienced the following events for the Year 1 accounting period: Acquired $75,000 cash from the issue of common stock. Purchased $74,000 of inventory...
- B Business Your firm has a credit rating of A and that the credit spread for the 5-year maturity bond is 110 basis points (1.1%). Your firm s 5-year quarterly coupon bond has...
- B Business Prepare the journal entry(ies) for the following transactions: a. May 2, 2019: Main Street Enterprises purchased office supplies, for $2,000, on account. b. June 2,...
- B Business Sound Audio manufactures and sells audio equipment for automobiles. Engineers notified management in December 2021 of a circuit flaw in an amplifier that poses a potential...
- B Business At December 31, 2016, Oriole Corporation had the following stock outstanding. 10% cumulative preferred stock, $100 par, 108,506 shares $10,850,600 Common stock, $5...
- B Business You borrow $6,230 to buy a car. The terms of the loan call for monthly payments for 5 years a rate of interest of 6 percent. What is the amount of each payment?a. $115.26b....
- B Business The following information is provided for the year: Actual direct labor hours worked 42,760 Budgeted overhead $900,000 Budgeted direct labor hours 46,650 Actual overhead...
- B Business How will an expansionary monetary policy most likely change aggregate demand, output, and price level?...
- B Business Six visual aids in presentetions...
Ответ:
Year 1
Jan. 2
Investment in Grey $501,000 (debit)
Cash $501,000 (credit)
Sept. 1
Share of Profit of Associate : Dividend Received $190,000 (debit)
Dividend Declared $190,000 (credit)
Year 2
June 1
Share of Profit of Associate : Dividend Received $190,000 (debit)
Dividend Declared $190,000 (credit)
Dec. 31
Cash $126,500 (debit)
Investment In Grey $126,500 (credit)
Explanation:
During the first year, Kim Company purchased 33% of stocks in Grey Co. This led to Kim Company having significant influence over Grey Co. Grey Co. is known as Associate Company.
The dividend paid by an Associate is Part of Share of profit from an associate and must be presented as such in the entity books.
During the second year, when Kim Company sells 10,000 shares of Grey Co, they lost part of Investment but still have significant influence (29%) in Grey Co.The Grey Co remains an Associate of Kim Company.
Ответ: