Gardens, Inc. invests its excess cash in Innovative Technologies, Inc. and acquires 2,700 shares for $29.50 per share. Garden, Inc. owns less than 5% of Innovative's voting stock and plans to hold the stock for two years. Which of the following is the correct journal entry for the transaction? O Equity Investments 79,650 Cash O Common Stock - Gardens Cash O Cash Equity Investments O Cash Common Stock - Gardens 79,650 79,650 79,650 79,650 79,650 79,650 79,650

Gardens, Inc. invests its excess cash in Innovative Technologies, Inc. and acquires 2,700 shares for $29.50 per share. Garden, Inc. owns less than 5% of Innovative's voting stock and plans to hold the stock for two years. Which of the following is the correct journal entry for the transaction? O Equity Investments 79,650 Cash O Common Stock - Gardens Cash O Cash Equity Investments O Cash Common Stock - Gardens 79,650 79,650 79,650 79,650 79,650 79,650 79,650

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 25E

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K Gardens, Inc. Invests its excess cash in Innovative Technologies, Inc. and acquires 4,100 shares for $27.00 per share. Garden, Inc. owns less than 3% of Innovative's voting stock and plans to hold the stock for two years. Which of the following is the correct journal entry for the transaction? OA. Equity Investments Cash 110,700 110,700 OB. Common Stock - Gardens Cash 110,700 110,700 OC. Cash 110,700 Common Stock - Gardens 110,700 OD. Cash Equity Investments 110,700 110,700
On March 1, 2024, Garden Company invests $13,000 in Firs, Inc. stock. Firs pays Garden a $200 dividend on August 1, 2024. Garden sells the Firs' stock on August 31, 2024, for $13,350. Assume the investment is categorized as a short-term equity investment and Garden Company does not have significant influence over Firs, Inc 1. Journalize the transactions for Garden's investment in Firs' stock. 2. What was the net effect of the investment on Garden's net income for the year ended December 31, 2024
ABC Financial Services Inc. invested $15,000 to acquire 3,750 shares of EDFInvestments Inc. on March 15, 2012. This investment represents less thun 20% of the investee's voting stock. On May 7, 2016, ABC Financial Services Inc. sells 1,950 shares for $11,050. Which of the following will be the correct journal entry for this transaction?Introduction to Fir29:01 Finlnswer SheetA. Cash$ 11,050 Loss on Disposal$ 3,950Investments$ 15,000B. Cash$ 11,050Investment$ 7,800Gain on Disposal$ 3,250C. Cash$ 11,050Investments$ 11,050D. Gain on Disposal$ 11,050Investments$ 11,050
Following is a list of investments owned by Martinez Ltd., as of the company’s year-end, December 31, 2020: Investment No. Shares Cost Fair Value HFX Corporation 1,200 $9.00 $8.20 FDY Ltd. 2,100 6.50 6.55 CTN Corporation 3,700 7.00 7.60 On January 15, 2021, Martinez sold the shares in CTN Corporation for $8.10 per share. Prepare the journal entries required to record the sale, assuming the company uses the fair value through other comprehensive income without recycling method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 15, 2021 (To adjust to current fair value) (To record the sale of shares) (Reclassification…
Gardens, Inc. invests its excess cash in Innovative Technologies, Inc. and acquires 5,000 shares for $26.50 per share. Garden, Inc. owns less than 2% of Innovative's voting stock and plans to hold the stock for two years. Which of the following is the correct journal entry for the transaction? O A. Cash Equity Investments OB. Cash Common Stock - Gardens OC. Equity Investments Cash O D. Common Stock - Gardens Cash 132,500 132,500 132,500 132,500 132,500 132,500 132,500 132,500 h
Blue Spruce Corporation purchased 300 common shares of Burke Inc. for $22,830 and accounted for them using FV-OCI. During the year, Burke paid a cash dividend of $3.45 per share. At year end, Burke shares had a fair value of $72.50 per share. (a) Prepare Blue Spruce's journal entry to record the purchase of the investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
On March 1, 2018, Rawlins Company invests $25,000 in Ashton Company stock. Ashton pays Rawlins a $800 dividend on September 30, 2018. Rawlins sells the Ashton stock on November 30, 2018 for $23,500. Assume the investment is categorized as a short-term equity investment and that Rawlins does not have significant influence over Ashton. Requirements: 1. Journalize the transactions for Rawlins' investment in Ashton's stock.
Arcola, Inc., acquires all 40,000 shares of Tuscola Company for $725,000. A year later, when Arcola’s equity adjusted balance in its investment in Tuscola equals $800,000, Tuscola issues an additional 10,000 shares to outside investors for $25 per share. Which of the following best describes the effect of Tuscola’s stock issue on Arcola’s investment account?a. No effect because the shares were all sold to outside parties.b. The investment account is reduced because Arcola now owns a smaller percentage of Tuscola.c. The investment account is increased because Arcola’s share of Tuscola’s value has increased.d. No effect because Arcola maintains control over Tuscola despite the new stock issue.
Following is a list of investments owned by Ivanhoe Ltd., as of the company’s year-end, December 31, 2020: Investment No. Shares Cost Fair Value HFX Corporation 1,000 $8.00 $7.10 FDY Ltd. 3,000 6.90 6.95 CTN Corporation 4,600 5.00 5.80 On January 15, 2021, Ivanhoe sold the shares in CTN Corporation for $6.25 per share. Prepare the journal entries required to record the sale, assuming the company uses the fair value through other comprehensive income without recycling method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 15, 2021 (To adjust to current fair value) (To record the sale of shares) (Reclassification…
Indigo Corporation purchased 370 shares of Sherman Inc. common stock for $13,100 (Indigo does not have significant influence). During the year, Sherman paid a cash dividend of $3.00 per share. At year-end, Sherman stock was selling for $37.50 per share. Assume the stock is nonmarketable. Prepare Indigo's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.)
On January 1, 2022, Wayne Corporation acquired 55,000 common shares of Garth Company for $30 each. At the time, Garth had 687,500 common shares outstanding. The investment was classified as FV-NI. During 2022, Garth reported net income of $800,000 and did not declare or pay dividends. At the end of 2022, the fair value of Garth’s shares was $35 per share. REQUIRED: Prepare Wayne Corporation’s journal entries for the investment in Garth for the 2022 fiscal year. Please don't give image based answer..thanku
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