Heidebrecht Design acquired 20% of the outstanding common stock of Quayle Company on January 1, 2020, by
Question:
Heidebrecht Design acquired 20% of the outstanding common stock of Quayle Company on January 1, 2020, by paying $800,000 for the 30,000 shares. Quayle declared and paid $0.30 per share cash dividends on March 15, June 15, September 15, and December 15, 2020. Quayle reported net income of $320,000 for the year. At December 31, 2020, the market price of Quayle common stock was $34 per share.
Instructions
a. Prepare the journal entries for Heidebrecht Design for 2020 assuming Heidebrecht Design cannot
exercise significant influence over Quayle.
b. Prepare the journal entries for Heidebrecht Design for 2020, assuming Heidebrecht Design can exercise significant influence over Quayle. Use the equity method.
c. Indicate the balance sheet and income statement account balances at December 31, 2020, under each method of accounting.
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Accounting Principles
ISBN: 978-1119411482
13th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso