50.1K

Verified Solution

Link Copied!

journal entry for net income, dividends, inventory adjustment, and depreciation adjustment.

Northwest Paperboard Company, a paper and allied products manufacturer, was seeking to gain a foothold in Canada. Toward that end, the company bought 40% of the outstanding common shares of Vancouver Timber and Milling. Incorporated on January 2,2026 for $520 million. At the date of purchase, the book value of Vancouver's net assets was $835 million. The book values and fair values for all balance sheet items were the same except for inventory and plant facilities. The fair value exceeded book value by $5million for the inventory and by $30 million for the plant facilities. The estimated useful life of the plant facilities is 15 years. All inventory acquired was sold during 2024. Vancouver reported net income of $140 million for the year ended December 31, 2024. Vancouver paid a cash dividend of $30 milition. Required: 1. Prepare all appropriate journal entries related to the investment during 2024 2. What amount should Northwest report as its income from its investment in Vancouver for the year ended December 31,2024? 3. What amount should Northwest report in its balance sheet as its investment in Vancouver? 4. What should Northwest report in its statement of cash flows regarding its investment in Vancouver? Journal entry worksheet 5 Record the entry related to the purchase. Note: Enter debits before credits. What amount should Northwest report as its income from its investment in Vancouver for the year ended December 31,2024? Note: Enter your answer in mittions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5 ). What amount should Northwest report in its balance sheet as its investment in Vancouver? Note: Enter your answer in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5). What should Northwest report in its statement of cash flows regarding its investment in Vancouver? Note: Enter all amounts as positive values. Enter your answers in millions (t.e., 10,000,000 should be entered as 10)

Answer & Explanation Solved by verified expert

See Answer