Dragon Corporation acquired a 35% interest in Roger Inc. for $350,000 on January 1 of the current year. Specifically, Dragon acquired 63,000 of the 180,000 voting common shares outstanding. Roger reported net income of $210,000 at the end of the current year and paid cash dividends of $32,000 during the current year. At the time of acquisition, the book value of Roger's net assets equaled its market value. Roger's shares were selling for $15 per share at the end of the current year. Read the requirements. Requirement a. Prepare all journal entries required to record the transactions indicated assuming that Dragon uses the equity method. (Record debits first, then credits. Exclude explanations from any journal entries. If no entry is required select "No Entry Required" on the first line of the journal entry table and leave all remaining cells in the table blank.) Record Dragon Corporation's acquisition of a 35% share of Roger Inc. on January 1 of the current year. Equity Method Account January 1 Requirements -X a. Prepare all journal entries required to record the transactions indicated assuming that Dragon uses the equity method. b. Determine the carrying value of the investment at the end of the current year assuming that Dragon uses the equity method. C. Record any entry required for Dragon Corporation as a result of Roger Inc. reporting net income of $210,00 Equity Method: Prepare the journal entries required to account for Dragon's investment in Roger assuming that the investment does not permit Dragon to exercise significant influence over Roger. December 31 Account Print Done
Dragon Corporation acquired a 35% interest in Roger Inc. for $350,000 on January 1 of the current year. Specifically, Dragon acquired 63,000 of the 180,000 voting common shares outstanding. Roger reported net income of $210,000 at the end of the current year and paid cash dividends of $32,000 during the current year. At the time of acquisition, the book value of Roger's net assets equaled its market value. Roger's shares were selling for $15 per share at the end of the current year. Read the requirements. Requirement a. Prepare all journal entries required to record the transactions indicated assuming that Dragon uses the equity method. (Record debits first, then credits. Exclude explanations from any journal entries. If no entry is required select "No Entry Required" on the first line of the journal entry table and leave all remaining cells in the table blank.) Record Dragon Corporation's acquisition of a 35% share of Roger Inc. on January 1 of the current year. Equity Method Account January 1 Requirements -X a. Prepare all journal entries required to record the transactions indicated assuming that Dragon uses the equity method. b. Determine the carrying value of the investment at the end of the current year assuming that Dragon uses the equity method. C. Record any entry required for Dragon Corporation as a result of Roger Inc. reporting net income of $210,00 Equity Method: Prepare the journal entries required to account for Dragon's investment in Roger assuming that the investment does not permit Dragon to exercise significant influence over Roger. December 31 Account Print Done
Chapter8: Consolidated Tax Returns
Section: Chapter Questions
Problem 36P
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Question
Transcribed Image Text:Dragon Corporation acquired a 35% interest in Roger Inc. for $350,000 on January 1 of the current year. Specifically, Dragon acquired 63,000 of the 180,000 voting common shares outstanding. Roger reported
net income of $210,000 at the end of the current year and paid cash dividends of $32,000 during the current year. At the time of acquisition, the book value of Roger's net assets equaled its market value. Roger's
shares were selling for $15 per share at the end of the current year.
Read the requirements.
Requirement a. Prepare all journal entries required to record the transactions indicated assuming that Dragon uses the equity method. (Record debits first, then credits. Exclude explanations from any journal
entries. If no entry is required select "No Entry Required" on the first line of the journal entry table and leave all remaining cells in the table blank.)
Record Dragon Corporation's acquisition of a 35% share of Roger Inc. on January 1 of the current year.
Equity Method
Account
January 1
Requirements
-X
a.
Prepare all journal entries required to record the transactions indicated
assuming that Dragon uses the equity method.
b.
Determine the carrying value of the investment at the end of the current year
assuming that Dragon uses the equity method.
C.
Record any entry required for Dragon Corporation as a result of Roger Inc. reporting net income of $210,00
Equity Method:
Prepare the journal entries required to account for Dragon's investment in
Roger assuming that the investment does not permit Dragon to exercise
significant influence over Roger.
December 31
Account
Print
Done
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