in Carter for $37 per share. Required Prepare the journal entry at December 31, Year 6, to reclassify the Prepare all journal entries for Year 7 related to Anderson's investment from significant influence tc investment in Carter.
in Carter for $37 per share. Required Prepare the journal entry at December 31, Year 6, to reclassify the Prepare all journal entries for Year 7 related to Anderson's investment from significant influence tc investment in Carter.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:market to obtain control over Carter. Accordingly, the investment in Carter was reclassified as a
investment. The fair value of the Carter shares was $35 per share on this date. In Year 7, Carter reported
profit of $115,000 and paid dividends of $50,000. On December 31, Year 7, Anderson sold its investment
in Carter for $37 per share. Required Prepare the journal entry at December 31, Year 6, to reclassify the
investment from significant influence tc
Prepare all journal entries for Year 7 related to Anderson's
investment in Carter.
Transcribed Image Text:On January 1, Year 5, Anderson Corporation paid $650,000 for 20, 000 (20%) of the outstanding shares of
Carter Inc. The investment was considered to be one of significant influence. In Year 5, Carter reported profit
of $95,000; in Year 6, its profit was $105,000. Dividends paid were $60,000 in each of the two years.
Required Calculate the balance in Anderson's investment account as at December 31, Year 6. Part B Now
assume that on December 31, Year 6, Anderson lost its ability to significantly influence the operating,
investing, and financing decisions for Carter when another party obtained sufficient shares in the open
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