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At a total cost of $6,030,000, Herrera Corporation acquired 224,000 shares of Tran Corp. common stock as a long-term investment. Tran Corp. has 800,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation. Required: a. Journalize the entries by Herrera Corporation to record the following information on December 31: 1. Tran Corp. reports net income of $933,000 for the current period.* 2. A cash dividend of $0.27 per common share is paid by Tran Corp. during the current period.* b. Why is the equity method appropriate for the Tran Corp. investment? *Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Do not round your intermediate calculations. When required, round final answers to the nearest dollar. P

At a total cost of $6,030,000, Herrera Corporation acquired 224,000 shares of Tran Corp. common stock as a long-term investment. Tran Corp. has 800,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation. Required: a. Journalize the entries by Herrera Corporation to record the following information on December 31: 1. Tran Corp. reports net income of $933,000 for the current period.* 2. A cash dividend of $0.27 per common share is paid by Tran Corp. during the current period.* b. Why is the equity method appropriate for the Tran Corp. investment? *Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Do not round your intermediate calculations. When required, round final answers to the nearest dollar. P

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At a total cost of $6,030,000, Herrera Corporation acquired 224,000 shares of Tran Corp. common stock as a long-term investment. Tran Corp. has 800,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation. 3 Required: a. Journalize the entries by Herrera Corporation to record the following information on December 31: 1. Tran Corp. reports net income of $933,000 for the current period.* 2. A cash dividend of $0.27 per common share is paid by Tran Corp. during the current period.* b. Why is the equity method appropriate for the Tran Corp. investment? *Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Do not round your intermediate calculations. When required, round final answers to the nearest dollar. $ 4 F4 R F Q Search с V F5 % ci do 5 T G F6 6 B Y Y H F7 COM & 7 U F8 J * 00 8 8 F9 N N M 9 K 09 F10 0 F11 L P + F12 ^. ; PrtSc + 11 [ @1 ? Insert I ]
Transcribed Image Text:At a total cost of $6,030,000, Herrera Corporation acquired 224,000 shares of Tran Corp. common stock as a long-term investment. Tran Corp. has 800,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation. 3 Required: a. Journalize the entries by Herrera Corporation to record the following information on December 31: 1. Tran Corp. reports net income of $933,000 for the current period.* 2. A cash dividend of $0.27 per common share is paid by Tran Corp. during the current period.* b. Why is the equity method appropriate for the Tran Corp. investment? *Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Do not round your intermediate calculations. When required, round final answers to the nearest dollar. $ 4 F4 R F Q Search с V F5 % ci do 5 T G F6 6 B Y Y H F7 COM & 7 U F8 J * 00 8 8 F9 N N M 9 K 09 F10 0 F11 L P + F12 ^. ; PrtSc + 11 [ @1 ? Insert I ]
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