Waterway Company issued 820 shares of no-par common stock for $15000. Which of t

Question

Waterway Company issued 820 shares of no-par common stock for $15000. Which of the following journal entries would be made if the stock has no stated value?

A. Cash 15000 Common Stock 15000

B. Cash 15000 Common Stock 820 Paid-in Capital in Excess of Par 10000

C.Cash 15000 Common Stock 820 Paid-in Capital in Excess of Stated Value 14180

D. Common Stock 15000 Cash 15000

Concord Company owns 20% interest in the stock of Pharoah Corporation. During the year, Pharoah pays $20200 in dividends to Concord, and reports $293000 in net income. Concord Company’s investment in Pharoah will increase Concord's net income by
A. $58600.

B.

For accounting purposes, the method used to account for long-term investments in common stock is determined by

B.

Explanation / Answer

1 Cash 15000 Common Stock 15000 2 Net income increase = 293000*20%= 58600 3 Stock Investments 10200          Cash 10200 4 the method used to account for long-term investments in common stock is determined by the extent of an investor’s influence on the operating and financial affairs of the investee.

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