Answered Essay: dle Corporation has been acquiring shares of Fast Track Enterpri

Idle Corporation has been acquiring shares of Fast Track Enterprises at book value for the last several years. Fast Track provided data including the following:

 

20X2 20X3 20X4 20X5
  Net Income $ 41,000 $ 56,000 $ 41,000 $ 51,000
  Dividends 21,000 21,000 11,000 21,000

 

Fast Track declares and pays its annual dividend on November 15 each year. Its net book value on January 1, 20X2, was $253,000. Idle purchased shares of Fast Track on three occasions:
Date Percent of Ownership
Purchased
Amount Paid
  January 1, 20X2 10 % $ 25,300
  July 1, 20X3 5 17,710
  January 1, 20X5 14 70,840
Required:
Prepare the journal entries to be recorded on Idle’s books in 20X5 related to its investment in Fast Track. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)
Record purchase of Fast Track stock.
Record the pick-up of the difference between cost and equity income.
Record dividend from Fast Track Enterprises.
Record equity-method income.

Expert Answer

 

Journal entries to be recorded on Idle’s books in 20X5 related to its investment in Fast Track is as shown below:

Date Particulars L.F Amount ($) Amount ($)
1 Investment in Fast Track Enterprises Stock 70,840
Cash 70,840
(For purchase of Idle enterprises stock recorded)
2 Investment in Fast Track Enterprises Stock 10,350
Retained earnings 10,350
(For pick up difference between cost and equity income)
2012 = (41,000-21,000) = 20,000*10% = 2,000
2013 = (56,000/2)*10% + (56,000/2 – 21,000)*15% = 3,850
2014 = (41,000-11,000)*15% = 4,500
Amount of increase = 10,350
3 Cash 6,090
   Investment in Fast Track Enterprises Stock 6,090
(for dividend received in Idle Corp shares)
21,000*.29
4 Investment in Fast Track Enterprises Stock 14,790
Income from Fast track 14,790
(For equity method income recorded 51,000*.29)
Buy Essay
Calculate your paper price
Pages (550 words)
Approximate price: -

Help Me Write My Essay - Reasons:

Best Online Essay Writing Service

We strive to give our customers the best online essay writing experience. We Make sure essays are submitted on time and all the instructions are followed.

Our Writers are Experienced and Professional

Our essay writing service is founded on professional writers who are on stand by to help you any time.

Free Revision Fo all Essays

Sometimes you may require our writers to add on a point to make your essay as customised as possible, we will give you unlimited times to do this. And we will do it for free.

Timely Essay(s)

We understand the frustrations that comes with late essays and our writers are extra careful to not violate this term. Our support team is always engauging our writers to help you have your essay ahead of time.

Customised Essays &100% Confidential

Our Online writing Service has zero torelance for plagiarised papers. We have plagiarism checking tool that generate plagiarism reports just to make sure you are satisfied.

24/7 Customer Support

Our agents are ready to help you around the clock. Please feel free to reach out and enquire about anything.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

HOW OUR ONLINE ESSAY WRITING SERVICE WORKS

Let us write that nagging essay.

STEP 1

Submit Your Essay/Homework Instructions

By clicking on the "PLACE ORDER" button, tell us your requires. Be precise for an accurate customised essay. You may also upload any reading materials where applicable.

STEP 2

Pick A & Writer

Our ordering form will provide you with a list of writers and their feedbacks. At step 2, its time select a writer. Our online agents are on stand by to help you just in case.

STEP 3

Editing (OUR PART)

At this stage, our editor will go through your essay and make sure your writer did meet all the instructions.

STEP 4

Receive your Paper

After Editing, your paper will be sent to you via email.