Equity Method for Stock Investment On January 4, Year 1, Ferguson Company purchased 140,000 shares of Silva Company directly from one of the founders for a price of $39 per share. Silva has 400,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $406,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $1,259,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva. cash/cash dividends/dividend revenue/income of silva company/investment in silva company stock/notes receivable/ a. Provide the Ferguson Company journal entries for the transactions involving its investment in Silva Company during Year 1. Year 1, Jan. 4 fill in the blank 702aed00a020001_2 fill in the blank 702aed00a020001_4 Year 1, July 2 fill in the blank 702aed00a020001_6 fill in the blank 702aed00a020001_8 Year 1, Dec. 31 fill in the blank 702aed00a020001_10 fill in the blank 702aed00a020001_12 b. Determine the December 31, Year 1, balance of Investment in Silva Company Stock. $fill in the blank 9319c6f74f94012_1
Equity Method for Stock Investment
On January 4, Year 1, Ferguson Company purchased 140,000 shares of Silva Company directly from one of the founders for a price of $39 per share. Silva has 400,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $406,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $1,259,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva.
cash/cash dividends/dividend revenue/income of silva company/investment in silva company stock/notes receivable/
a. Provide the Ferguson Company
| Year 1, Jan. 4 | fill in the blank 702aed00a020001_2 | ||
| fill in the blank 702aed00a020001_4 | |||
| Year 1, July 2 | fill in the blank 702aed00a020001_6 | ||
| fill in the blank 702aed00a020001_8 | |||
| Year 1, Dec. 31 | fill in the blank 702aed00a020001_10 | ||
| fill in the blank 702aed00a020001_12 |
b. Determine the December 31, Year 1, balance of Investment in Silva Company Stock.
$fill in the blank 9319c6f74f94012_1
A journal is the book of original entry in which all the financial transactions of the business are recorded initially.
The table below shows the journal entries required to be passed in the books of company:
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