In early January 2023, Flounder Inc., a private enterprise that applies ASPE, purchased 40% of...
70.2K
Verified Solution
Link Copied!
Question
Accounting
In early January 2023, Flounder Inc., a private enterprise that applies ASPE, purchased 40% of the common shares of Washi Corp. for $361,000. Flounder was now able to exercise considerable influence in decisions made by Washi's management. Washi's statement of financial position reported the following information at the date of acquisition: Additional information: 1. Both the carrying amount and fair value are the same for non-depreciable assets and for liabilities. 2. The fair value of the assets subject to depreciation is $660,000. 3. The company depreciates its capital assets on a straight-line basis. 4. Washi reported net income of $143,000 and declared and paid dividends of $99,000 in 2023 . Assume the same facts as above and in part (b), except that Washi's net income included a loss on discontinued operations of $33,000 (net of tax). Prepare the journal entries necessary to record Flounder's equity in the net income of Washi for 2023. Ignore income taxes. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries.)
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
In early January 2023, Flounder Inc., a private enterprise that applies ASPE, purchased 40% of the common shares of Washi Corp. for $361,000. Flounder was now able to exercise considerable influence in decisions made by Washi's management. Washi's statement of financial position reported the following information at the date of acquisition: Additional information: 1. Both the carrying amount and fair value are the same for non-depreciable assets and for liabilities. 2. The fair value of the assets subject to depreciation is $660,000. 3. The company depreciates its capital assets on a straight-line basis. 4. Washi reported net income of $143,000 and declared and paid dividends of $99,000 in 2023 . Assume the same facts as above and in part (b), except that Washi's net income included a loss on discontinued operations of $33,000 (net of tax). Prepare the journal entries necessary to record Flounder's equity in the net income of Washi for 2023. Ignore income taxes. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries.) 