Equity investments: 20%–50% ownership On January 2, 20Y4, Whitworth Company acquired 40% of the outstanding stock of Aloof Company for $340,000. For the year ended December 31, 20Y4, Aloof Company earned income of $180,000 and paid dividends of $10,000. On January 31 20Y5, Whitworth Company sold all of its investment in Aloof Company stock for $405,000. Journalize the entries for Whitworth Company for the purchase of the stock, the share of Aloof income, the dividends received from Aloof Company, and the sale of the Aloof Company stock. If an amount box does not require an entry, leave it blank. Jan. 2, 20Y4 - Purchase Investment in Aloof Company Stock Investment in Aloof Company Stock Cash Cash Dec. 31, 20Y4 - Income Investment in Aloof Company Stock Investment in Aloof Company Stock Income of Aloof Company Income of Aloof Company Dec. 31, 20Y4 - Dividends Cash Cash Investment in Aloof Company Stock Investment in Aloof Company Stock Jan. 31, 20Y5 - Sale Cash Cash Loss on Sale of Aloof Company Stock Loss on Sale of Aloof Company Stock Investment in Aloof Company Stock Investment in Aloof Company Stock
Equity investments: 20%–50% ownership On January 2, 20Y4, Whitworth Company acquired 40% of the outstanding stock of Aloof Company for $340,000. For the year ended December 31, 20Y4, Aloof Company earned income of $180,000 and paid dividends of $10,000. On January 31 20Y5, Whitworth Company sold all of its investment in Aloof Company stock for $405,000. Journalize the entries for Whitworth Company for the purchase of the stock, the share of Aloof income, the dividends received from Aloof Company, and the sale of the Aloof Company stock. If an amount box does not require an entry, leave it blank. Jan. 2, 20Y4 - Purchase Investment in Aloof Company Stock Investment in Aloof Company Stock Cash Cash Dec. 31, 20Y4 - Income Investment in Aloof Company Stock Investment in Aloof Company Stock Income of Aloof Company Income of Aloof Company Dec. 31, 20Y4 - Dividends Cash Cash Investment in Aloof Company Stock Investment in Aloof Company Stock Jan. 31, 20Y5 - Sale Cash Cash Loss on Sale of Aloof Company Stock Loss on Sale of Aloof Company Stock Investment in Aloof Company Stock Investment in Aloof Company Stock
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Equity investments: 20%–50% ownership
On January 2, 20Y4, Whitworth Company acquired 40% of the outstanding stock of Aloof Company for $340,000. For the year ended December 31, 20Y4, Aloof Company earned income of $180,000 and paid dividends of $10,000. On January 31 20Y5, Whitworth Company sold all of its investment in Aloof Company stock for $405,000.
| Jan. 2, 20Y4 - Purchase |
|
Investment in Aloof Company Stock | Investment in Aloof Company Stock |
|
|
Cash | Cash | |
| Dec. 31, 20Y4 - Income |
|
Investment in Aloof Company Stock | Investment in Aloof Company Stock |
|
|
Income of Aloof Company | Income of Aloof Company | |
| Dec. 31, 20Y4 - Dividends |
|
Cash | Cash |
|
|
Investment in Aloof Company Stock | Investment in Aloof Company Stock | |
| Jan. 31, 20Y5 - Sale |
|
Cash | Cash |
|
|
Loss on Sale of Aloof Company Stock | Loss on Sale of Aloof Company Stock | |
|
|
Investment in Aloof Company Stock | Investment in Aloof Company Stock |
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