During 2023, Elisabeth Ltd. purchased 8,000 shares of Lilly of the Valley Corp. for $34 per share ($272,000 total). Elisabeth held these shares until September 2025, when it sold them for $42 per share. During these three years, Lilly of the Valley paid dividends of $2 per share on July 31. On Elisabeth's fiscal year-end (December 31), shares of Lilly of the Valley closed at $39, $30, and $46 in 2023, 2024, and 2025, respectively. Required Assume that the company designated half of the Lilly of the Valley shares as FVPL and the other half irrevocably elected to record fair value changes through OCI. Determine the amounts to be reported on Elisabeth's balance sheet and statement of comprehensive income with respect to the company's investment in Lilly of the Valley Corp. What do you observe about the total amount of retained earnings for the three years combined? Complete the analysis for 2024.

During 2023, Elisabeth Ltd. purchased 8,000 shares of Lilly of the Valley Corp. for $34 per share ($272,000 total). Elisabeth held these shares until September 2025, when it sold them for $42 per share. During these three years, Lilly of the Valley paid dividends of $2 per share on July 31. On Elisabeth's fiscal year-end (December 31), shares of Lilly of the Valley closed at $39, $30, and $46 in 2023, 2024, and 2025, respectively. Required Assume that the company designated half of the Lilly of the Valley shares as FVPL and the other half irrevocably elected to record fair value changes through OCI. Determine the amounts to be reported on Elisabeth's balance sheet and statement of comprehensive income with respect to the company's investment in Lilly of the Valley Corp. What do you observe about the total amount of retained earnings for the three years combined? Complete the analysis for 2024.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 18E: Monona Company reported net income of 29,975 for 2019. During all of 2019, Monona had 1,000 shares...

See similar textbooks

Similar questions

On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a 30% corporate income tax rate. During 2019, Kittson earned net income of 67,000, and the following events occurred: 1. Cash dividends of 3 per share on 4,000 shares of common stock were declared and paid. 2. A small stock dividend was declared and issued. The dividend consisted of 600 shares of 10 par common stock. On the date of declaration, the market price of the companys common stock was 36 per share. 3. The company recalled and retired 500 shares of 100 par preferred stock. The call price was 125 per share; the stock had originally been issued for 110 per share. 4. The company discovered that it had erroneously recorded depreciation expense of 45,000 in 2018 for both financial reporting and income tax reporting. The correct depreciation for 2018 should have been 20,000. This is considered a material error. Required: 1. Prepare journal entries to record Items 1 through 4. 2. Prepare Kittsons statement of retained earnings for the year ended December 31, 2019.
Monona Company reported net income of 29,975 for 2019. During all of 2019, Monona had 1,000 shares of 10%, 100 par, nonconvertible preferred stock outstanding, on which the years dividends had been paid. At the beginning of 2019, the company had 7,000 shares of common stock outstanding. On April 2, 2019, the company issued another 2,000 shares of common stock so that 9,000 common shares were outstanding at the end of 2019. Common dividends of 17,000 had been paid during 2019. At the end of 2019, the market price per share of common stock was 17.50. Required: 1. Compute Mononas basic earnings per share for 2019. 2. Compute the price/earnings ratio for 2019.
Ponce Towers, Inc., had 50,000 shares of common stock and 10,000 shares of 100 par value, 8% preferred stock outstanding on January 1, 2011. Each share of preferred stock is convertible into four shares of common stock. The stock has not been converted. During the year, Ponce Towers issued additional shares of common stock as follows: For 2011, Ponce Towers, Inc., had income from continuing operations of 545,000 and a 72,000 loss from discontinued operations (net of tax). As vice president of finance for the firm, you have been asked to calculate earnings per share for 2011. The worksheet EPS has been provided to assist you.
. Min Hyun Jing Ltd. purchased 21,600 common shares of Glastone Ltd. on January 1, 2018, when the market price was $27.50 per share. This gave Min Hyun Jing 12% of the shares issued by Glastone Ltd. Min Hyun Jing Ltd. has a December 31 year end. For the year ended December 31, 2018, Glastone reported net income of $260,000 and declared dividends of $1.10 per share on December 31. The trading price of Glastone’s shares on that date was $31.20. For the year ended December 31, 2019. Glastone reported net income of $280,000 and declared dividends of $1.15 per share on December 31. The trading price of Glastone’s shares on December 31 was 34.60. Min Hyun Jing Ltd. purchased an additional 20,000 common shares on this date. For the year ended December 31, 2020, Glastone reported a net loss of $80,000, but still declared dividends on December 31, in the amount of $0.75 per share. The trading price of Glastone’s shares on December 31, 2019 was $30.50 per share. For the year ended…
Toy Co Corporation purchased 282,000 of the 940,000 common shares of Abacus Ltd. on October 1, 2021, at $2.10 per share. Near the end of the fourth quarter ended on December 29th, Abacus declared dividends on its common shares of $74,000 but the dividend payment date is not until 2022. Abacus also announced that it had net income for the quarter ended December 31, 2021, of $188,000.Record the journal entries that Toy Co would make during the last quarter ended December 31, 2021, under the following assumptions: Toy Co does not have significant influence over Abacus and uses the cost model to account for this investment. (List all debit entries before credit entries. 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.) Please donot provide solution in image format provide solution in step by step format with fast solution
On July 1, 2021, Tremen Corporation acquired 40% of the shares of Delany Company. Tremen paid $3,090,000 for the investment, and that amount is exactly equal to 40% of the book value of identifiable net assets on Delany's balance sheet. Delany recognized net income of $1,500,000 for 2021, and paid $150,000 of dividends each quarter to its shareholders. After all closing entries are made for the year ended December 31, 2021, Tremen's "Investment in Delany Company" account would have a balance of: Multiple Choice $3,708,000. $3,270,000. $3,630,000. $3,390,000. Ba
On April 15, 2023, Rizzo Inc. purchased 34,500 shares of Hernandez, Inc. for $22 per share (passive interest). During the year Rizzo Inc. sold 4,500 shares of Hernandez, Inc. for $25 per share. Rizzo Inc. started operations on January 1, 2023. At December 31, 2023 the market price of Hernandez, Inc.’s stock was $19 per share. What is the total amount of unrealized gain (loss) that Rizzo Inc. will report through its income statement for the year ended December 31, 2023 related to its investment in Hernandez, Inc. stock?
Tulip Corp. purchased 300,000 shares of common stock in Sherman Co. for $50 per share on January 2, 2021, which represents 25% of Sherman Co.s outstanding shares. During 2021, Sherman Co. paid cash dividends of $300,000 and reported net income of $1,000,000. At the end of 2021, Sherman Co.'s stock price had dropped to $49 per share. What should appear on Tulip Corp.s income statement in 2021 because of this investment? A: ($300,000) B: ($225,000) C: $75,000 D: $250,000
On January 1, 2022, Mojito Corporation purchased 20% (20,000 shares) of the outstanding stock of Dulcinea Corporation for $153,000. During 2022, Dulcinea Corporation paid total dividends of $45,000 and earned $80,000 in net income. At the end of 2022, Dulcinea Corporation’s stock had a fair market value of $155,000. Required: Prepare the journal entries that Mojito would make during 2022 assuming that they do NOT have significant influence over Dulcinea as a result of their stock ownership (i.e. fair value method). Prepare the journal entries that Mojito would make during 2022 assuming that they do have significant influence over Dulcinea as a result of their stock ownership (i.e. equity method).
On April 1, 2019, Star Company purchased 30,000 ordinary shares of Moon Company at P180 per share, a price that approximates book value as of that date. At the time of the purchase, Moon had 100,000 ordinary shares outstanding. Star had no ownership interest in Moon before the purchase. The first quarter statement ending March 31, 2019 of Moon recorded earnings of P500,000. For the year remaining 9 months of 2019, Moon reported profit of P2,800,000. White paid Star dividends of P80,000 on June 1 and again P70,000 on December 31, 2019. During 2020, Moon reported profit of P2,000,000 and paid dividends of P2,000,000 to jits shareholders. On January 1, 2021, Star sold 10,000 ordinary shares of Moon for P220 per share. For the year ended December 31, 2021, the reported profit of Moon was P2,500,000 and dividends of P60,000 were paid to Star. The market value of Moon shares remained unchanged during the year 2021. Q: The carrying value of Star Company's investment in Moon on December…
On April 1, 2019, Star Company purchased 30,000 ordinary shares of Moon Company at P180 per share, a price that approximates book value as of that date. At the time of the purchase, Moon had 100,000 ordinary shares outstanding. Star had no ownership interest in Moon before the purchase. The first quarter statement ending March 31, 2019 of Moon recorded earnings of P500,000. For the year remaining 9 months of 2019, Moon reported profit of P2,800,000. White paid Star dividends of P80,000 on June 1 and again P70,000 on December 31, 2019. During 2020, Moon reported profit of P2,000,000 and paid dividends of P2,000,000 to jits shareholders. On January 1, 2021, Star sold 10,000 ordinary shares of Moon for P220 per share. For the year ended December 31, 2021, the reported profit of Moon was P2,500,000 and dividends of P60,000 were paid to Star. The market value of Moon shares remained unchanged during the year 2021. Refer to Star Company. The carrying value of Star Company's investment in…
On April 1, 2019, Star Company purchased 30,000 ordinary shares of Moon Company at P180 per share, a price that approximates book value as of that date. At the time of the purchase, Moon had 100,000 ordinary shares outstanding. Star had no ownership interest in Moon before the purchase. The first quarter statement ending March 31, 2019 of Moon recorded earnings of P500,000. For the year remaining 9 months of 2019, Moon reported profit of P2,800,000. White paid Star dividends of P80,000 on June 1 and again P70,000 on December 31, 2019. During 2020, Moon reported profit of P2,000,000 and paid dividends of P2,000,000 to jits shareholders. On January 1, 2021, Star sold 10,000 ordinary shares of Moon for P220 per share. For the year ended December 31, 2021, the reported profit of Moon was P2,500,000 and dividends of P60,000 were paid to Star. The market value of Moon shares remained unchanged during the year 2021. Refer to Star Company. The gain of Star Company on the sale of 10,000…