Reference no: EM131997446
Question - Equity method of accounting for Investments
On January 2, 2011, Coca-Cola Company acquired 45% of the stocks of Coca-Cola FEMSA for $30 million in cash. Coca-Cola Company accounts for its investment using the equity method. At the time of acquisition, Coca-Cola FEMSA' balance sheet was as follows (in millions):
Assets:
Current Assets 20
Property & equipment, net 415
Patents & Trademarks 150
Total Assets 585
Liabilities & Equity:
Current Liability 42
Long-term debt 518
Capital Stock 12
Retained Earnings 13
Total Liability & Equity 585
Valuation of Coca-Cola FEMSA' assets and liabilities revealed that its reported patents and trademarks (10-year life) had a fair value of $160 million and it had unrecognized brand names (15-year life) worth $9 million. Coca-Cola FEMSA's December 31, 2014, retained earnings balance is $25 million. For 2014, it reported net income of $2.5 million and paid $650,000 in dividends.
Required:
1. Prepare the 2014 entries to report the above information on Coca-Cola' books? Show all your calculations.
2. Calculate the Investment in Coca-Cola FEMSA balance, reported on Coca-Cola' December 31, 2014 Show all your calculations.
|
Aviya kushner in his article why dead languages like akkadia
: Does the author Aviya Kushner in his article why dead languages like akkadian Still Matter has a valid point? should we be actively preserving languages?
|
|
Construct a table showing the profit from the strategy
: Construct a table showing the profit from the strategy. For what range of stock prices would the butterfly spread lead to a loss?
|
|
What does the sotu say about the state of security in the us
: What signals are sent about the ideas we have covered so far like deterrence, the balance of power, state sovereignty, and terrorism?
|
|
Akkadian still matter has a valid point
: Does the author Aviya Kushner in his article why dead languages like akkadian Still Matter has a valid point? should we be actively preserving languages?
|
|
Calculate the investment in coca-cola femsa balance
: Calculate the Investment in Coca-Cola FEMSA balance, reported on Coca-Cola' December 31, 2014 Show all your calculations
|
|
What is the objective of accounting standards
: A sound foundation is necessary for success in any task from building a house to putting on make-up. What is the objective of accounting standards
|
|
Determine the equity income to be recognized by killearn
: Shaun resold $92,000 of this inventory during 2014 and the remaining $60,000 during 2015. Determine the equity income to be recognized by killearn
|
|
What is the arithmetic return for the stock
: A stock had returns of 18 percent, 12 percent, 19 percent, 14 percent, 13 percent, and -7 percent over the last six years.
|
|
Will the options have the same premium
: The stock price of XYZ Co. is currently $40. There exists both a put and a call option on this stock, and both options expire 6 months from now.
|