Martin purchased 80% of Lewis for $750,000 on January 1, 20x1. Martin's excess of cost over...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Martin purchased 80% of Lewis for $750,000 on January 1, 20x1. Martin's excess of cost over book value was $10,000. The excess due to undervalued equipment is to be amortized over four years. During 20x1, Lewis sold inventory for a profit of $8,000 to Martin which is still in their inventory at December 31, 20x1. During 20x2,Lewis sold to Martin inventory costing $40,000 for $50,000. At year end, 25% of that inventory is still on hand in the inventory of Martin. Lewis reported income of $200,000 in 20x2. For 20x2, using the equity method, record the profits from Lewis on the books of Martin. Dr. Cr. Martin purchased 80% of Lewis for $750,000 on January 1, 20x1. Martin's excess of cost over book value was $10,000. The excess due to undervalued equipment is to be amortized over four years. During 20x1, Lewis sold inventory for a profit of $8,000 to Martin which is still in their inventory at December 31, 20x1. During 20x2,Lewis sold to Martin inventory costing $40,000 for $50,000. At year end, 25% of that inventory is still on hand in the inventory of Martin. Lewis reported income of $200,000 in 20x2. For 20x2, using the equity method, record the profits from Lewis on the books of Martin. Dr. Cr.
Expert Answer:
Answer rating: 100% (QA)
Facts of Question 1 Martin acquired 80 of the stake of Lewis for 750000 2 Excess of cost over value ... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-0538480284
11th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Posted Date:
Students also viewed these accounting questions
-
On January 1 20X1 Alpha Inc purchased 400000 95 bonds of Theta Limited The bonds pay interest annually every December 31 and would mature on December 31 20x5 The bonds were acquired to yield 1025...
-
Helene Gauthier invested $15 000 on January 1 in a partnership. She withdrew $2000 on June 1, withdrew a further $1500 on August 1, and reinvested $4000 on November 1. What was her average monthly...
-
A mortgage for $235 000 is amortized over 25 years. Interest is 4.6% p.a., compounded semiannually, for a 5-year term and payments are monthly. (a) Compute the monthly payment. (b) Compute the...
-
You are given the following information concerning Parrothead Enterprises: Calculate the company?s WACC. Debt: 13,000 6.4 percent coupon bonds outstanding, with 15 years to maturity and a quoted...
-
Upper World Corporation sells tractor trailers on the installment plan. On October 1, 2014, Upper World entered into an installment-sale contract with Lower Sky Inc. for a 5-year period. Equal annual...
-
What factors need to be considered when interpreting ratios?
-
How many days does the defendant have to remove an action to federal court after the defendant receives notice of the plaintiffs state court complaint?
-
The Cinco Centavo Company (CCC), a U.S. company, made credit sales to four customers in Asia on September 15, 2018, and received payment on October 15, 2018. Information related to these sales is as...
-
A condensed balance sheet for Bradford Corporation prepared at the end of the year appears as follows: Cash Assets Liabilities & Stockholders' Equity Notes payable (due in 6 months) $ 105,000...
-
Consider the following Mini-Triangle program let in yarn: Integer; proc p () - nn 2 begin n = 9; p() end (a) Draw the decorated AST for this program (b) Produce the identification table for this...
-
The store manager has decided that rather than have the cashiers take inventory at the end of each shift, he will complete the inventory himself each morning when he arrives so that he can stay on...
-
Describe the steps for using the strategy of Vocabulary Development with the student in physical education (make sure to describe the steps fully)
-
A rectangular barge, 5.8 mm long and 2.0 mm wide, floats in fresh water. Suppose that a 360-kg crate of auto parts is loaded onto the barge. How much deeper does the barge float? Express your answer...
-
Identify each cost as a period cost or a product cost. If it is a product cost, further indicate if the cost is direct materials, direct labor, or manufacturing overhead. Then, determine if the...
-
A bicycle tire pump has a piston with area 0.43 in . If a person exerts a force of 16 lb on the piston while inflating a tire, what pressure does this produce on the air in the pump? A large truck...
-
A 2.0 kg object is sliding along a frictionless surface at 5.0 m/s when it reaches an incline that is sloped upwards at 30 degrees from the horizontal. At the moment it reaches the bottom of the...
-
An ECM operation is used to cut a hole into a plate of stainless steel that is 10 mm thick. The hole has a rectangular cross section, 15 mm by 25 mm. The operation is accomplished at a current = 1300...
-
Chris Zulliger was a chef at the Plaza Restaurant in the Snowbird Ski Resort in Utah. The restaurant is located at the base of a mountain. As a chef for the Plaza, Zulliger was instructed by his...
-
Explain why it is important to separately account for the principal and income of an estate and what happens if such assets are not adequate to satisfy demonstrative or general legacies.
-
Recover Rehabilitation Hospital has the following balances that are extracted from its December 31, 2019, trial balance: From the above information, prepare a statement of activities for the year...
-
Marsha Corporation purchases an 80% interest in the common stock of Transam Corporation on December 31, 2013, for $720,000, when Transam has the following condensed balance sheet: On the December 31,...
-
List the reports available for reporting cash flows.
-
What additional steps are necessary to create a statement of cash flows for a period other than the one ending on the computers current system date?
-
Identify three different periods of time that QuickBooks Accountant provides for a statement of cash flows.
Study smarter with the SolutionInn App