Prepare the entry recorded by Vision to record the sale of the shares assuming e
ID: 2517630 • Letter: P
Question
Prepare the entry recorded by Vision to record the sale of the shares assuming excess of the sale price over the carrying value is recorded as an increase in Paid in Capital and the eliminating entries for 12/31/09. (My Question)
Assuming we could do 300,000 * .60, 300,000 *.40, subtract dividends and income... Then I'm lost.
Vision Corporation acquired 75 percent of the stock of Meta Company on January 1, 2007, for $225,000. At that date, the fair value of the noncontrolling interest was S75,000 On January 1, 2009, Vision sold 1,500 shares of Meta's $10 par value shares for S60,000 in cash. Meta's balance sheet at the time of the sale contained the following amounts Cash Accounts Receivable Inventory $50,000 50,000 100,000 Buildings and Equipment (net) 300.000 Retained Earnings 200.000 $400,000 $40,000 Accounts Payable 40,000 Bonds Payable 20,000 Common Stock Total Assets $400,000 During the year of 2009 Meta reported net income of $30,000 and paid dividends of $10,000 Vision used the fully adjusted equity method in accounting for its ownership of Meta Company Ownership Position at Acquisition Ownership Position at Sale Vision-6000-60% NCI- 4000-4090 10,000 100% Vision-7500-75% NCI 25% 10.000 100% Prepare the entry recorded by Vision to record the sale of the shares assuming excess of the sale price over the carrying value is recorded as an increase in Paid in Capital and the eliminating entries for 12/31/09Explanation / Answer
Income of Meta
Intial Investment Investment in Meta Dr. 225000 Cash Cr. 225000 Sales of Investment Cash Dr 60000 Investment in Meta Cr 45000 Increase in Paid in Capital Cr 15000 Year EndIncome of Meta
Investment in Meta Dr 18000 Equity Income Cr 18000 Dividend received Cash Dr 6000 Investment in Meta Cr 6000