Kellogg’s Corporation purchased shares of Swingline Corporation
Question # 00029407
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Updated on: 10/26/2014 04:03 PM Due on: 10/30/2014
Kellogg’s Corporation purchased shares of Swingline Corporation in the following sequence:
Date No. of Shares Purchased Amount Paid
January 1, 2013 2,000 shares $35,000
January 1, 2014 500 shares 25,000
January 1, 2015 3,000 shares 90,000
The book value of Swingline’s net assets at January 1, 2013 was $220,000. Each year since Kellogg’s first purchased shares, Swingline has reported net income of $90,000 and paid dividends of $40,000. The amount paid in excess of the book value of Swingline’s net assets was attributed to the increase in the value of identifiable intangible assets with a remaining life of five years at the date the shares of Swingline were purchased. Swingline has had 15,000 shares of voting common stock outstanding throughout the four-year period.
Required:
Give the journal entries recorded on Kellogg Corporation’s books in 2015 related to its investment in Swingline Corporation.
Date No. of Shares Purchased Amount Paid
January 1, 2013 2,000 shares $35,000
January 1, 2014 500 shares 25,000
January 1, 2015 3,000 shares 90,000
The book value of Swingline’s net assets at January 1, 2013 was $220,000. Each year since Kellogg’s first purchased shares, Swingline has reported net income of $90,000 and paid dividends of $40,000. The amount paid in excess of the book value of Swingline’s net assets was attributed to the increase in the value of identifiable intangible assets with a remaining life of five years at the date the shares of Swingline were purchased. Swingline has had 15,000 shares of voting common stock outstanding throughout the four-year period.
Required:
Give the journal entries recorded on Kellogg Corporation’s books in 2015 related to its investment in Swingline Corporation.
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Rating:
/5
Solution: Accounting solution