ACC 557 Week 8 Chapter 12 E12 7 E12 8 E12 12 P12 2A

Question Details: #8263
ACC 557 Week 8 Chapter 12 E12 7 E12 8 E12 12 P12 2A

EXERCISE 12-7

 

(a)   Jan.  1     Stock Investments.....................................    180,000

                                  Cash.....................................................                      180,000

 

        Dec. 31     Cash ($60,000 X 25%)...............................     15,000

                                  Stock Investments.............................                       15,000

 

                31     Stock Investments.....................................     50,000

                                  Revenue from Stock Investments

                                   ($200,000 X 25%).............................                       50,000

 

(b)   Investment in Morelli, January 1..........................................         $180,000

        Less:  Dividend received.......................................................            15,000

        Plus:  Share of reported income.................................................     50,000

        Investment in Morelli, December 31....................................         $215,000

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Exercise 12-7

On January 1, Vince Corporation purchased a 25% equity in Morelli Corporation for $180,000. At December 31, Morelli declared and paid a $60,000 cash dividend and reported net income of $200,000.

 

 

 

 

 

 

 

(a)

 

Your answer is correct.

 

 

Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit

Jan. 1

 

Dec. 31

 

 

(To record dividends received)

 

 

Dec. 31

 

 

(To record equity in Morelli Corporation's net income)

 

 

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Attempts: 1 of 3 used

 

 

 

 

 

 

 

 

(b)

 

Your answer is correct.

 

 

Determine the amount to be reported as an investment in Morelli stock at December 31.

Investment in Morelli December 31

 

$

Click here if you would like to Show Work for this question

 

 

 

 

 

 

 

 

Attempts: 1 of 3 used

 

 

 

 

 

 

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Solution Details: #8264
ACC 557 Week 8 Chapter 12 (E12-7 E12-8 E12-12 P12-2A)

EXERCISE 12-7 (a) Jan.  1 Stock Investments 180,000 Cash 180,000 Dec. 31 Cash ($60,000 X 25%)  15,000 Stock Investments  15,000 31 Stock Investments  50,000 Revenue from Stock Investments  ($200,000 X 25%)  50,000 (b) Investment in Morelli, January 1 $180,000 Less: Dividend received   15,000 Plus: Sha...
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