Business, 31.01.2022 03:30 Anonymousmike

Points Item 6
Problem 1-26 (Algo) (LO 1-2, 1-4, 1-5)

On December 31, 2019, Akron, Inc., purchased 5 percent of Zip Company's common shares on the open market in exchange for $15,700. On December 31, 2020, Akron, Inc., acquires an additional 25 percent of Zip Company's outstanding common stock for $96,500.

During the next two years, the following information is available for Zip Company:

Income Dividends Declared Common Stock
Fair Value (12/31)
2019 $314,000
2020 $74,000 $6,000 386,000
2021 86,000 14,700 489,000

At December 31, 2020, Zip reports a net book value of $294,000. Akron attributed any excess of its 30 percent share of Zip's fair over book value to its share of Zip's franchise agreements. The franchise agreements had a remaining life of 10 years at December 31, 2020.

Assume Akron applies the equity method to its Investment in Zip account:

What amount of equity income should Akron report for 2021?
On Akron’s December 31, 2021, balance sheet, what amount is reported for the Investment in Zip account?

Assume Akron uses fair-value accounting for its Investment in Zip account:

What amount of income from its investment in Zip should Akron report for 2021?
On Akron’s December 31, 2021, balance sheet, what amount is reported for the Investment in Zip account?

Answers: 1

Show answers

Another question on Business

Business, 22.06.2019 01:30

How will firms solve the problem of an economic surplus a. decrease prices to the market equilibrium price b. decrease prices so they are below the market equilibrium price c.increase prices

Answers: 3

Answer

Business, 22.06.2019 21:40

Engberg company installs lawn sod in home yards. the company’s most recent monthly contribution format income statement follows: amount percent of sales sales $ 80,000 100% variable expenses 32,000 40% contribution margin 48,000 60% fixed expenses 38,000 net operating income $ 10,000 required: 1. compute the company’s degree of operating leverage. (round your answer to 1 decimal place.) 2. using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in sales. (do not round intermediate calculations.) 3. construct a new contribution format income statement for the company assuming a 5% increase in sales.

Answers: 3

Answer

Business, 22.06.2019 23:10

The direct labor budget of yuvwell corporation for the upcoming fiscal year contains the following details concerning budgeted direct labor-hours: 1st quarter 2nd quarter 3rd quarter 4th quarterbudgeted direct labor-hours 11,200 9,800 10,100 10,900the company uses direct labor-hours as its overhead allocation base. the variable portion of its predetermined manufacturing overhead rate is $6.00 per direct labor-hour and its total fixed manufacturing overhead is $80,000 per quarter. the only noncash item included in fixed manufacturing overhead is depreciation, which is $20,000 per quarter.required: 1. prepare the company’s manufacturing overhead budget for the upcoming fiscal year.2. compute the company’s predetermined overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year.

Answers: 3

Answer

Business, 23.06.2019 11:00

If you wanted to gain workplace experience and learn more about a company, what opportunity would be most ? a. job shadowing b. an informational interview c. an internship d. online research

Answers: 2

Answer

You know the right answer?

Points Item 6
Problem 1-26 (Algo) (LO 1-2, 1-4, 1-5)

On December 31, 2019, Akron...

Questions