on its year imis report support for your answer BHow inputs/support for your ans
ID: 2516335 • Letter: O
Question
on its year imis report support for your answer BHow inputs/support for your answer as "Investment in Hamilton" on its 12/310x8 balance Show inputs/ What amount did Adams report as immediatelyafter ams report as Goodwill on its consolidated balance sheet acquisition of Hamilton? Show inputs/support for your answer #14 Smith Company obtained 100 percent of Wesson Company's common stock afair value of by issuing 15,000 shares of its $1 par comm $18 on that date on stock. Smith's common stock had a fair value of e date of acquisition, Wesson reported a net book value of $210,000. Some of Wesson's assets (with a 5-year remaining life) were undervalued by $30,000 in the company's On the accounting records. Wesson also holds an intangible asset with an estimated fair value ot $20,000 over carrying amount. The intangible asset has an estimated remaining useful life of 10 years. Smith Company uses the equity-method to account for its investment in Wesson. plant During 20X6 Smith and Wesson reported the following Smith Wesson $500,000 $280,000 125,000 80,000 Net Income Dividends Declared Pre pare all of the journal entries recorded by Smith in 20X6 related to its investment in Wesson.Explanation / Answer
Particulars
Dr.
$
Cr.
$
1
Investment in Wesson Ltd
To Cash Ac
Investment purchased
15000
15000
2
Investment in Wesson Ltd
To P&L/ Investment Income
Overvalue of investment
30000
3000
3
P&L /Investment expense
To Investment in Wesson Ltd
Undervalue of investment
20000
20000
4
Investment in Wesson Ltd
To P&L/ Investment Income
28000
28000
5
6
Bank/ Cash
to Dividend in Wesson Ltd
Dividend in Wesson Ltd
To P Investment in Wesson Ltd
80000
80000
80000
800000
Particulars
Dr.
$
Cr.
$
1
Investment in Wesson Ltd
To Cash Ac
Investment purchased
15000
15000
2
Investment in Wesson Ltd
To P&L/ Investment Income
Overvalue of investment
30000
3000
3
P&L /Investment expense
To Investment in Wesson Ltd
Undervalue of investment
20000
20000
4
Investment in Wesson Ltd
To P&L/ Investment Income
28000
28000
5
6
Bank/ Cash
to Dividend in Wesson Ltd
Dividend in Wesson Ltd
To P Investment in Wesson Ltd
80000
80000
80000
800000
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