Super Control Group Has the Following Investments A)Explain How These Investments Will Be Classified and Accounted For {CYZ

question 90

Essay

Super Control Group has the following investments:
$\begin{array}{c}\begin{array}{|l|}\hline \\\\\\\hline \text {CYZ Corp }\\\\\hline \text {VWX Inc.}\\\\\\\hline \text {ABC InC}\\\\\\\\\hline \end{array}\begin{array}{l|}\hline \\\\ \text {Transactions}\\\hline \text {- Purchased all of the outstanding shares on }\\\text { Mar 31 for \( \$ 1,500,000 \).}\\\hline \text {- Prirchased \( 80 \% \) for \( \$ 1,000,000 \)}\\\text { Acquired joint control over the strategic, }\\\text {operating and investing decisions on January 1.}\\\hline \text {- Purchased \( 25 \% \) of the outstanding shares on}\\\text { June 30 for \( \$ 300,000 \).}\\\text {- Super Control can appoint one member to the}\\\text { Board of Directors.}\\\hline\end{array}\begin{array}{r|}\hline \text {Net income of}\\\text {Investee for}\\\text {calendar 2019}\\\hline \$ 1,000,000 \\\\\hline 200,000\\\\\\\hline 50,000\\\\\\\\\hline \end{array}\begin{array}{r|}\hline\\ \text {Fair value}\\ \text {at Dec, 31, 2019}\\\hline \$ 1,150,000 \\\\\hline175,000\\\\\\\hline320,000\\\\\\\\\hline\end{array}\end{array}$
a)Explain how these investments will be classified and accounted for.
b)How much income will be recorded in 2019 by Super Group for its investment in VWX?
c)How much income will be recorded in 2019 by Super Group for its investment in ABC?

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Definitions:

Ledger

A comprehensive collection of a company's accounts, documenting all transactions and financial results.

Chart of Accounts

An organized list of all accounts in the general ledger of a company, each with a unique account number, used for recording transactions and preparing financial statements.

Book of Original Entry

A preliminary accounting record where transactions are first recorded; also known as a journal.

Chart of Accounts

An organized list of all the accounts used in a company's general ledger, categorized into assets, liabilities, equity, revenues, and expenses.