Walker's Liam's Widgets, Inc. acquired 42% of the outstanding common stock of Liam's Levers, Inc. for...

 

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Walker's Liam's Widgets, Inc. acquired 42% of the outstanding common stock of Liam's Levers, Inc. for $1,000,000. This investment gave Walker's Widgets the ability to exercise significant influence over Liam's Levers. Levers's assets on that date were recorded at $2,000,000 with liabilities of $1,500,000. Any excess of cost over book value of the investment was attributed to a copyright having a remaining useful life of 16 years. In 2017, Liam's Levers reported net income of $300,000 and paid cash dividends of $250,000 to investors. Record the following journal entries at the end of 2017. Important information on formatting to earn full points: For accounts, make sure you correctly spell account names for full points. For amounts, do NOT use "$" or ".##" in any of your answers. Provide the full amount (DO NOT truncate with k or m, instead show all ",000" as needed JE to record equity pickup dr. (account) [1] $(amount) [2] cr. (account) [3] $(amount) [4] JE to record excess amortization dr. (account) [5] $(amount) [6] cr. (account) [7] $(amount) [8] JE to record cash dividend received dr. (account) [9] $(amount) [10] cr. (account) [11] $(amount) [12] Calculate the ending balance in the Equity Investment account for 2017. $[13] Walker's Liam's Widgets, Inc. acquired 42% of the outstanding common stock of Liam's Levers, Inc. for $1,000,000. This investment gave Walker's Widgets the ability to exercise significant influence over Liam's Levers. Levers's assets on that date were recorded at $2,000,000 with liabilities of $1,500,000. Any excess of cost over book value of the investment was attributed to a copyright having a remaining useful life of 16 years. In 2017, Liam's Levers reported net income of $300,000 and paid cash dividends of $250,000 to investors. Record the following journal entries at the end of 2017. Important information on formatting to earn full points: For accounts, make sure you correctly spell account names for full points. For amounts, do NOT use "$" or ".##" in any of your answers. Provide the full amount (DO NOT truncate with k or m, instead show all ",000" as needed JE to record equity pickup dr. (account) [1] $(amount) [2] cr. (account) [3] $(amount) [4] JE to record excess amortization dr. (account) [5] $(amount) [6] cr. (account) [7] $(amount) [8] JE to record cash dividend received dr. (account) [9] $(amount) [10] cr. (account) [11] $(amount) [12] Calculate the ending balance in the Equity Investment account for 2017. $[13]

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We use equity method of accounting for investments in associates WN1 Computation of Excess Value of ... View the full answer