Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on january 2, 2017, hull corp. paid $516,000 for 2

On January 2, 2017, Hull Corp. paid $516,000 for 24% (48,000 shares) of the outstanding...

70.2K

Verified Solution

Question

Accounting

On January 2, 2017, Hull Corp. paid $516,000 for 24% (48,000 shares) of the outstanding common stock of Oliver Co. Hull used the equity method to account for the investment. At the end of 2017, the balance in the investment account was $620,000. On January 2, 2018, Hull sold 12,000 shares of Oliver stock for $12 per share. For 2018, Oliver reported net income of $118,000 and paid dividends of $30,000. Required: (A) Prepare the journal entry to record the sale of the 12,000 shares. (B) After the sale has been recorded, what is the balance in the investment account? (C) What percentage of Oliver Co. stock does Hull own after selling the 12,000 shares? (D) Because of the sale of stock, Hull can no longer exercise significant influence over the operations of Oliver. What effect will this have on Hulls accounting for the investment? (E) Prepare Hulls journal entries related to the investment for the rest of 2018.

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!
Become a Member

Other questions asked by students

Q

A treadmill manufacturer has developed a new machine with softer tread and better fans than its...

Basic Math
Q

2. a. Describe three physiological changes that occur within a plant during drought. ​​​​​​​​​​​​​ b. Write an...

Medical Sciences
Q

‏1. The impeller in a centrifugal pump has inner diameter as 125 mm and outer diameter...

Mechanical Engineering
Q

English Four charges 1 C 2 C 3 C and 4 uC are placed at...

Physics
Q

Points A and B lie on a circle centered at point O. If length of...

Geometry
Q

Save Exit Certify Lesson 2 3a Finding the Equation of a Line Question 1 of...

Algebra
Q

ACCOUNT Work in ProcessBaking Department ACCOUNT NO. ...

Accounting
Q

Acme Companys current ratio is less than 1.0. Which of the following transactions will increase...

Accounting
Q

Problem C-2A (Algo) Consider present value (LO C-3, C-5) Bruce is considering the purchase of...

Accounting
Q

Pascal, Inc. is planning to sell 800,000 units for $1.50 per unit. The contribution margin...

Accounting
Q

BETA AND REQUIRED RATE OF RETURN A stock has a required return of 15%; the...

Accounting
Q

12. Valuing preferred stock Aa Aa Companies that have preferred stock outstanding promise to pay...

Finance