EXAM 4 Chart of Accounts Journal Final Question On January 4, 2016, Spandella Co

Question

EXAM 4 Chart of Accounts Journal Final Question On January 4, 2016, Spandella Company purchased 179,400 shares of Filington Company directly from one of the founders for a price of $26 per share. Flington has 460,000 shares outstanding, induding the shares acquired by Spandella Company, On July 2, 2016, Filington paid $762,000 in total dividends to its shareholders. On December 31, 2016, Filington reported a net income of $1,182,000 for the year. Spandella uses the equity method in accounting for its investment in Filington Required: A. Provide the Spandela Company journal entries for the transactions involving its investment in Flington Company duning 2016. Refer to the Chart of Accounts for exact wording of account beles B. Decermine the December 31, 2016, balance of the Investment in ington Company Stock account Type here to search 2 5 6 7 8 9

Explanation / Answer

Balance sheet amount:

Workings:

Date General journal Debit Credit Jan.4 Investment in fligton company          4,664,400 To cash          4,664,400 [ 179400 common shares of fligton purchased] Dec.31 Investment in fligton company              441,773 Equity in Earnings of fligton company              441,773 [Share of earning for the year] Dec.31 Cash              284,798 Investment in Austin mining              284,798 [Dividends received]

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