h7 On January 1, Year 5, Pic Company acquired 7,500 ordinary shares of Sic Company for $600,000. On January 1, Year 6, Pic Companyacquired an additional 2,000 ordinary shares of Sic Company for $210,000. On January 1, Year 5, the shareholders' equity of Sic wasas follows:Ordinary shares (10,000 no par value shares issued)Retained earnings$200,000354,000$554,000The following are the statements of retained earnings for the two companies for Years 5 and 6:PicYear 5SicYear 6$ 655,000151,500(120,000)Year 5$ 354,000105,000(90,000)Year 6$ 369,000118,000(90,000)$ 655,000$ 686,500$ 369,000$ 397,000Retained earnings, beginning of yearProfitDividendsRetained earnings, end of year$ 608,000147,000(100,000)Additional Information• Pic uses the cost method to account for its investment in Sic.• Any acquisition differential is allocated to customer contracts, which are expected to provide future benefits until December 31, Year7. Neither company has any customer contracts recorded on their separate-entity records.•There were no unrealized profits from intercompany transactions since the date of acquisition.Required:(a) Calculate consolidated profit attributable to Pic's shareholders for Year 6. (Omit $ sign in your response.)Consolidated profit attributable to Pic's shareholders$(b) Calculate the following account balances for the consolidated statement of financial position at December 31, Year 6: (Omit $ signin your response.)(i) Customer contracts(ii) Non-controlling interest(iii) Retained earnings$$

Investment in Associates and Joint venture and SubsidiaryEquity Accounting method - This approach is…

Required: (a) Calculate consolidated profit attributable to Pic's shareholders for Year 6. (Omit $ sign in your response.) Consolidated profit attributable to Pic's shareholders $ (b) Calculate the following account balances for the consolidated statement of financial position at December 31, Year 6: (Omit $ sign in your response.) (i) Customer contracts (ii) Non-controlling interest (iii) Retained earnings ԵԴ ԵԴ ԵԴ

Required: (a) Calculate consolidated profit attributable to Pic's shareholders for Year 6. (Omit $ sign in your response.) Consolidated profit attributable to Pic's shareholders $ (b) Calculate the following account balances for the consolidated statement of financial position at December 31, Year 6: (Omit $ sign in your response.) (i) Customer contracts (ii) Non-controlling interest (iii) Retained earnings ԵԴ ԵԴ ԵԴ

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter21: Corporations: Taxes, Earnings, Distributions, And The Statement Of Retained Earnings

Section: Chapter Questions

Problem 9SPB: CASH DIVIDENDS, STOCK DIVIDEND, AND STOCK SPLIT During the year ended December 31, 20--, Baggio...

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Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2016, were as follows: a. Issued 15,000 shares of 20 par common stock at 30, receiving cash. b. Issued 4, 000 shares of 80 par preferred 5% stock at 100, receiving cash. c. Issued 500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. d. Declared a quarterly dividend of 0.50 per share on common stock and 1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. e. Paid the cash dividends declared in (d). f. Purchased 7,500 shares of Solstice Corp. at 40 per share, plus a 150 brokerage commission. The investment is classified as an available-for-sale investment. g. Purchased 8,000 shares of treasury common stock at 33 per share. h. Purchased 40,000 shares of Pinkberry Co. stock directly from the founders for 24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment. i. Declared a 1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. j. Paid the cash dividends to the preferred stockholders. k. Received 27,500 dividend from Pinkberry Co. investment in (h). l. Purchased 90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of 37 5. The bonds are classified as a held-to-maturity long -term investment. m. Sold, at 38 per share, 2,600 shares of treasury common stock purchased in (g). n. Received a dividend of 0 .60 per share from the Solstice Corp. investment in (f). o. Sold 1,000 shares of Solstice Corp. at 45, including commission. p. Recorded the payment of semiannual interest on the bonds issue d in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method . q. Accrued interest for three months on the Dream Inc. bonds purchased in (I). r. Pinkberry Co. recorded total earnings of 240 ,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. s. The fair value for Solstice Corp. stock was 39. 02 per share on December 31, 2016. The investment is adjusted to fair value , using a valuation allowance account. Assume Valuation Allowance for Available-for-Sale Investments h ad a beginning balance of zero. Instructions 1. Journalize the selected transactions. 2. After all of the transaction s for the year ended December 31, 201 6, had been poste d [including the transactions recorded in part (1) and all adjusting entries), the data that follows were taken from the records of Equinox Products Inc. a. Prepare a multiple-step in come statement for the year ended December 31, 201 6, concluding with earnings per share . In computing earnings per share, assume that the average number of common shares outstanding was 100,000 and preferred dividends were 100,000. ( Round earnings per share to the nearest cent.) b. Prepare a retained earnings statement for the year ended December 31, 20 6. c. Prepare a balance sheet in report form as of December 31, 2016.
Ames Corporation repurchases 10,000 shares of its common stock for $12 per share. The shares were originally issued at an average price of $10 per share. Later it resells 6,000 of the shares for $15 per share and the remaining 4,000 shares for $17 per share. How much gain or loss should Ames report on its income statement as a result of these transactions? $38.000 gain $0 $20,000 loss $20,000 loss and $38,000 gain
CASH DIVIDENDS, STOCK DIVIDEND, AND STOCK SPLIT During the year ended December 31, 20--, Baggio Company completed the following transactions: Apr. 15 Declared a semiannual dividend of 0.65 per share on preferred stock and 0.45 per share on common stock to shareholders of record on May 5, payable on May 10. Currently, 6,000 shares of 50 par preferred stock and 70,000 shares of 1 par common stock are outstanding. May 10 Paid the cash dividends. Oct. 15 Declared semiannual dividend of 0.65 per share on preferred stock and 0.45 per share on common stock to shareholders of record on November 5, payable on November 20. Nov. 20 Paid the cash dividends. 22 Declared a 10% stock dividend to shareholders of record on December 8, distributable on December 16. Market value of the common stock was estimated at 15 per share. Dec. 16 Issued certificates for common stock dividend. 20 Board of directors declared a two-for-one common stock split. REQUIRED Prepare journal entries for the transactions.