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question exercise 2 accounting for the income of a subsidiary meat wad inc 100 owned 4285211

Question

Exercise 2: Accounting for the Income of a Subsidiary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Meat Wad Inc., 100% owned by Frylock Inc., reports the following income and dividend results for 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income; 1st Quarter (3/31)

$150,000

 

Net Income; 3rd Quarter (9/30)

$45,000

 

 

Dividend Declared (6/15/17)

$10,000

 

Dividend Declared (12/15/17)

$15,000

 

 

Net Income; 2nd Quarter (6/30)

$75,000

 

Net Income; 4th Quarter (12/31)

$50,000

 

 

 

 

 

 

 

 

 

 

 

 

A) Record the 2017 journal entries made by Frylock to account for the income / dividends of Meat Wad using the Cost Method of accounting for the income of a subsidiary by entering the required amounts in the gray shaded cells. When correct, the cells will change color:

 

 

 

 

 

 

 

 

 

 

 

Date

Account

Debit

Credit

6/15/17

Dividends Receivable

 

 

 

 

 

 

 

 

Investment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/15/17

Dividends Receivable

 

 

 

 

 

 

 

 

Investment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B) Record the 2012 journal entries made by Frylock to account for the income / dividends of Meat Wad using the Equity Method of accounting for the income of a subsidiary by entering the required amounts in the gray shaded cells. When correct, the cells will change color:

 

 

 

 

 

 

 

 

 

 

 

Date

Account

Debit

Credit

3/31/17

Investment in Meat Wad

 

 

 

 

 

 

 

Investment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6/15/17

Dividends Receivable

 

 

 

 

 

 

 

 

Investment in Meat Wad

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6/30/17

Investment in Meat Wad

 

 

 

 

 

 

 

Investment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9/30/17

Investment in Meat Wad

 

 

 

 

 

 

 

Investment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/15/17

Dividends Receivable

 

 

 

 

 

 

 

 

Investment in Meat Wad

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/31/17

Investment in Meat Wad

 

 

 

 

 

 

 

Investment Income

 

 

 

 

 

Exercise 2: Accounting for the Income of a Subsidiary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Meat Wad Inc., 100% owned by Frylock Inc., reports the following income and dividend results for 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income; 1st Quarter (3/31)

$150,000

 

Net Income; 3rd Quarter (9/30)

$45,000

 

 

Dividend Declared (6/15/17)

$10,000

 

Dividend Declared (12/15/17)

$15,000

 

 

Net Income; 2nd Quarter (6/30)

$75,000

 

Net Income; 4th Quarter (12/31)

$50,000

 

 

 

 

 

 

 

 

 

 

 

 

                     

 

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