Prepare journal entries for plano

Assignment Help Financial Accounting
Reference no: EM1376242

On 1st January, 2009, Plano Company acquired 8 % (16,000 shares) of the outstanding voting shares of the Sumter Company for $192,000, an amount equal to Sumter's underlying book and fair value. Sumter pays a cash dividend to its stockholders each year of $100,000 on September 15. Sumter reported net income of $300,000 in 2009, $360,000 in 2010, $400,000 in 2011, and $380,000 in 2012. Each income figure will be assumed to have been earned evenly throughout its respective year. In addition, the fair value of these 16,000 shares was indeterminate, and therefore the investment account remained at cost. On 1st January, 2011, Plano purchased an additional 32 percent (64,000 shares) of Sumter for $965,750 in cash and began to use the equity method. This price represented a $50,550 payment in excess of the book value of Sumter's underlying net assets. Plano was willing to make this extra payment because of a lately developed patent held by Sumter with a 15-year remaining life. All other assets were considered suitably valued on Sumter's books.

On 1st July, 2012, Plano sold 10 % (20,000 shares) of Sumter's outstanding shares for$425,000 in cash. Although it sold this interest, Plano maintained ability to considerably influence Sumter's decision-making process. Suppose that Plano uses a weighted average costing system. Prepare journal entries for Plano for years of 2009 through 2012.

Reference no: EM1376242

Questions Cloud

For brother-sister corporations which definition applies : Which of the subsequent groups constitute a controlled group? (Any stock not listed below is held by unrelated individuals every owning less than 1% of the outstanding stock.) For brother-sister corporations, which definition applies?
Net income and earnings per share : Evaluate each of the following for every alternative Net income and Earnings per share.
Profit maximization and shareholder wealth maximization : Explain difference between profit maximization and shareholder wealth maximization and determine which of these is a more comprehensive statement of a firm's economic objectives?
Find the par value of the stock : when market value is $40 per share. Prior to split, Abbott had 50,000 shares of $10 par value common stock issued and outstanding. After split, Find the par value of the stock
Prepare journal entries for plano : Suppose that Plano uses a weighted average costing system. Prepare journal entries for Plano for years of 2009 through 2012.
Find how much are the monthly payments : he paid the balance by a loan from his hometown bank. The loan is to be paid on a monthly basis for 2 years charging 12 % interest. Find how much are the monthly payments?
Evaluate how does above bullet point affect ora audit report : Evaluate how does above bullet point affect Ora's audit report to Noved's Board of Directors and Jones's firm provided financial consulting services to Noved during 2009 and 2008, for which Noved paid just about $1,600 and $9,000, correspondingly.
Calculating herfindahl index : Determine the Herfindahl index for an industry composed of three companies one with 70% of the market, and the other two with 20 and 10 percent of the market respectively one company with 50% share
Financial and managerial accounting : Indicate the term describe, or answer (none ) if the statement does not correctly explain any of the terms.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd