On January 4, 2016, Spandella Company purchased 159,800 shares of Filington Comp
ID: 2582769 • Letter: O
Question
On January 4, 2016, Spandella Company purchased 159,800 shares of Filington Company directly from one of the founders for a price of $31 per share. Filington has 470,000 shares outstanding, including the shares acquired by Spandella Company. On July 2, 2016, Filington paid $782,000 in total dividends to its shareholders. On December 31, 2016, Filington reported a net income of $1,019,000 for the year. Spandella uses the equity method in accounting for its investment in Filington.
Required:
A. Provide the Spandella Company journal entries for the transactions involving its investment in Filington Company during 2016. Refer to the Chart of Accounts for exact wording of account titles. B. Determine the December 31, 2016, balance of the Investment in Filington Company Stock account. do?invoker= assignment-take∈ EXAM 4 calailator Eauity methoxl for Stuck ivestment EX 13-h AL 2. Ex 13 11.Ngo 3. Ex 13-2 A 4. Ex 13-8 Algo 5. EX.15-11 ALGO 6. EX. 15-9.ALG 7. EX.15 .ALGO 8. Ex 15-3Algo 9. EX.15-21.ALGO 10. EX 14-15 A Chart ot Accoaunts ournal Final Question 1Cumal On Janary 4, 2015, Spandela Company purchaserd 159,800 shares er Filington Company directly from one ef the founders for a pre 31 per share. iingten has 470,000 shares cutstanding, incuding the shares acuuired by Spandela Comparry, On July 2, 2016, lington paid782.000 in total dividend, to its shereholders. O" Oeuen.b 31, 2015, Fil.myter ported a "el rKum-of $1,019,000 for the 'red'. Spendells uses the CURNAL ) | Flington Required A. Prondc the Sndea Cam antes or the transctons inv vestmont FNingtan cCompan unng 2016. Nefer to the Chavt of Accounts for exact warcving of account . Datminc the Dccambor 31, 201G. bonceof Firal question 9. Determine the Decenter 31, 2010, balance of the Investment in Fongton Company Stock 20count. Progress: 2/11 items Tere Remuning: 1:57:44 226AM Type here to searchExplanation / Answer
a. Journal Entries:
In the books of Spandella
Date 04/01/2016
Shares of Filington Co A/c Dr $4953800
To Bank A/c $4953800
(Being Investment done in the equity of Filington Co)
b. Share of spandella in filington=159800/470000=34%
Hence Spandella has substantial holding.
Calculation of balance of investment in filington co stock account:
Acquisition $4953800
(-) dividend paid by filington (proportionate) $265880
(+) Earning in 2016 by Filington(Proportionate) $346460
Balance of Investment $5034380
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