Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Virginia Corp. owned all of the voting common stock of Stateside Co. Both companies use the perpetual inventory method, and Virginia decided to use the partial equity method to account for this investment. During 2020, Virginia made cash sales of $400,000 to Stateside. The gross profit rate was 30% of the selling price. By the end of 2020, Stateside had sold 75% of the goods to outside parties for $420,000 cash.
Prepare journal entries for Virginia and Stateside to record the sales/purchases during 2020.
On January 1, 2020, Ridge Road Company acquired 30 percent of the voting shares of Sauk Trail, Inc., for $4,400,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail’s board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail’s board, which gave it the ability to significantly influence Sauk Trail’s operating and investing activities.
The January 1, 2020, carrying amounts and corresponding fair values for Sauk Trail’s assets and liabilities follow:
Carrying Amount
Fair Value
Cash and receivables
$
195,000
$
195,000
Computing equipment
5,765,000
7,060,000
Patented technology
185,000
4,170,000
Trademark
235,000
2,170,000
Liabilities
(270,000
)
(270,000
)
Also, as of January 1, 2020, Sauk Trail’s computing equipment had a…
During the year 2021 Azimuth Corporation engaged in the following transaction with marketable securities:May 14: Azimuth purchases as a short-term investment 1,000 shares of ADIDAS. Azimuth paid €197.15 per share, plus a brokerage commission of €240. August 27: Azimuth sells 100 shares of its ADIDAS stock for €197.81 per share, less a €102 brokerage commission.October 10: Azimuth receives a €3.40 per share dividend on its ADIDAS shares.December 31: ADIDAS stock has a current market value of €198.12 per share.
3.1 Record the above four transactions in general journal.3.2. Define marketable securities. What characteristics of these securities justify classifying them as financial assets?
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- On January 1, 2020, Ridge Road Company acquired 20 percent of the voting shares of Sauk Trail, Inc., for $2,700,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail's board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail's board, which gave it the ability to significantly influence Sauk Trail's operating and investing activities. The January 1, 2020, carrying amounts and corresponding fair values for Sauk Trail's assets and liabilities follow: Cash and Receivables Computing Equipment Patented Technology Trademark Liabilities 2020 2021 Carrying Amount $ 110,000 5,000,000 100,000 150,000 (185,000) Net Income $1,800,000 1,985,000 Also, as of January 1, 2020. Sauk Trail's computing equipment had a seven-year remaining estimated useful life. The patented technology was…arrow_forwardOn January 1, 2020, Ridge Road Company acquired 25 percent of the voting shares of Sauk Trail, Inc., for $4,300,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail’s board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail’s board, which gave it the ability to significantly influence Sauk Trail’s operating and investing activities. The January 1, 2020, carrying amounts and corresponding fair values for Sauk Trail’s assets and liabilities follow: Carrying Amount Fair Value Cash and receivables $ 190,000 $ 190,000 Computing equipment 5,720,000 6,980,000 Patented technology 180,000 4,160,000 Trademark 230,000 2,160,000 Liabilities (265,000 ) (265,000 ) Also, as of January 1, 2020, Sauk Trail’s computing equipment had a…arrow_forwardOn January 1, 2020, Ridge Road Company acquired 25 percent of the voting shares of Sauk Trail, Inc., for $3,500,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail's board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail's board, which gave it the ability to significantly influence Sauk Trail's operating and investing activities. The January 1, 2020, carrying amounts and corresponding fair values for Sauk Trail's assets and liabilities follow: Cash and receivables Computing equipment Patented technology Trademark Liabilities 2020 2021 Also, as of January 1, 2020, Sauk Trail's computing equipment had a seven-year remaining estimated useful life. The patented technology was estimated to have a four-year remaining useful life. The trademark's useful life was considered…arrow_forward
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