2 10 points 2011254 On 1 January 20X5, Zan Company purchased 4,500 of the 18,000 outstanding...

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2 10 points 2011254 On 1 January 20X5, Zan Company purchased 4,500 of the 18,000 outstanding common shares of Woo Computer Corp. (WC) for $163,000 cash. Zan had significant influence as a result of the investment and will use the equity method to account for the Investment. On 1 January 20X5, the statement of financial position of WC showed the following book values (summarized): Assets not subject to depreciation Assets subject to depreciation (net) Liabilitie Common shares Retained earnings *Fair value, $231,500; difference relates to land. $204,100+ 163,000 54,100 243,600 **Fair value, $190,400, estimated remaining life, 5 years. 67,800 Assume there is no impairment of goodwill. Additional subsequent data on WC are as follows: Earnings Cash dividends declared and paid Fair value per share 2005 2016 $54,100 $80,100 42,100 68,100 225 44 Required: 1-1. Provide the investor's entries or give the required information for: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. Entry at date of acquisition. c. Entries at 31 December 20X5 to recognize investment revenue and dividends. d. Entries at 31 December 20X6 to recognize investment revenue and dividends. Answer is not complete. No Transaction General Journal 1 a. Investment in WC Corp Cash 2 c-1. Investment in WC Corp Investment revenue Debit 163,000 Credit 163,000 0 0 10,525 10,525 3 c-2 Cash Investment in WC Corp 4 d-1. Investment in WC Corp 0 Investment revenue 9 5 d-2. Cash Investment in WC Corp 1-2.Indicate the amount of goodwill purchased. Goodwill purchased 17,025 17,025 2. Are any entries needed to recognize a writedown to fair value at the end of 20X5 or 20X6? Yes No 3. Reconstruct the investment account, showing the opening and closing balances and all changes in the account. Answer is not complete. Acq Investment Account (Equity Method) Bal 4-1. How much investment revenue would be reported each year if the cost method was used? 20X5 2008 Investment revenue 4.2. What would be the balance in the investment account? Answer is complete and correct. Balance in the investment account 3163,000 2 10 points 2011254 On 1 January 20X5, Zan Company purchased 4,500 of the 18,000 outstanding common shares of Woo Computer Corp. (WC) for $163,000 cash. Zan had significant influence as a result of the investment and will use the equity method to account for the Investment. On 1 January 20X5, the statement of financial position of WC showed the following book values (summarized): Assets not subject to depreciation Assets subject to depreciation (net) Liabilitie Common shares Retained earnings *Fair value, $231,500; difference relates to land. $204,100+ 163,000 54,100 243,600 **Fair value, $190,400, estimated remaining life, 5 years. 67,800 Assume there is no impairment of goodwill. Additional subsequent data on WC are as follows: Earnings Cash dividends declared and paid Fair value per share 2005 2016 $54,100 $80,100 42,100 68,100 225 44 Required: 1-1. Provide the investor's entries or give the required information for: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. Entry at date of acquisition. c. Entries at 31 December 20X5 to recognize investment revenue and dividends. d. Entries at 31 December 20X6 to recognize investment revenue and dividends. Answer is not complete. No Transaction General Journal 1 a. Investment in WC Corp Cash 2 c-1. Investment in WC Corp Investment revenue Debit 163,000 Credit 163,000 0 0 10,525 10,525 3 c-2 Cash Investment in WC Corp 4 d-1. Investment in WC Corp 0 Investment revenue 9 5 d-2. Cash Investment in WC Corp 1-2.Indicate the amount of goodwill purchased. Goodwill purchased 17,025 17,025 2. Are any entries needed to recognize a writedown to fair value at the end of 20X5 or 20X6? Yes No 3. Reconstruct the investment account, showing the opening and closing balances and all changes in the account. Answer is not complete. Acq Investment Account (Equity Method) Bal 4-1. How much investment revenue would be reported each year if the cost method was used? 20X5 2008 Investment revenue 4.2. What would be the balance in the investment account? Answer is complete and correct. Balance in the investment account 3163,000