Advanced Accounting Final EXAM 100% SOLVED

Advanced Accounting Final EXAM 100% SOLVED B) $1,247,500 - ANSWEROn January 1 of the current year, Barger Company buys 150,000 shares of Booker, Inc.'s common stock for $1,200,000, the book value of the shares. This purchase gave Barger 25% ownership in Booker and the ability to significantly influence operating and financing decisions. At the time of the acquisition, Booker had a total book value of $4,800,000. During the current year, Booker reported net income of $700,000 and paid a $.85 per share dividend. Barger elects to use the equity method of accounting. What is the balance in the Investment in Booker account in the records of Barger Company at December 31, of the current year? A) $1,200,000 B) $1,247,500 C) $1,772,500 D) $1,900,000 E) $1,152,500 C) C - ANSWEROn January 1 of the current year, Barger Company buys 150,000 shares of Booker, Inc.'s common stock for $1,200,000, the book value of the shares. This purchase gave Barger 25% ownership in Booker and the ability to significantly influence operating and financing decisions. At the time of the acquisition, Booker had a total book value of $4,800,000. During the current year, Booker reported net income of $700,000 and paid a $.85 per share dividend. A. Cash $127,500 Dividend Income $127,500 B. Cash $127,500 Investment in Barger Company $127,500 C. Cash $127,500 Investment in Booker, Inc. $127,500 D. Investment in Booker, Inc. $127,500 Dividend Income $127,500 E. Investment in Barger Company $127,500 Dividend Income $127,500 Using the equity method of accounting, what is the journal entry to record the receipt of dividends during the current year? A) A B) B C) C D) D E) E D) D - ANSWEROn January 1 of the current year, Barger Company buys 150,000 shares of Booker, Inc.'s common stock for $1,200,000, the book value of the shares. This purchase gave Barger 25% ownership in Booker and the ability to significantly influence operating and financing decisions. At the time of the acquisition, Booker had a total book value of $4,800,000. During the current year, Booker reported net income of $700,000 and paid a $.85 per share dividend. A. No entry is recorded B. Investment in Booker, Inc. $700,000 Equity in Investee Income $700,000 C. Investment in Barger Company $700,00 Equity in Investee Income $700,000 D. Investment in Booker, Inc. $175,000 Equity in Investee Income $175,000 E. Investment in Barger Company $175,000 Equity in Investee Income $175,000 Using the equity method of accounting, what is the journal entry to accrue the current year earnings? A) A B) B C) C D) D E) E D) $7,500.00 - ANSWERTara Company owns 30% of Hawkins, Inc. and applies the equity method. During the current year, Hawkins buys inventory costing $400,000 and sells it to Tara for $500,000. At the end of the year, only 25% of this merchandise is still being held by Tara. What amount of unrealized gain must be deferred by Hawkins in repo