On January 1, 2018, West Coast Boats paid $ 1,850,000 for its 30% investment in East Coast Autos. After the purchase, West Coast Boats has significant influence over East Coast Autos. East Coast Autos earned net income of $30,000,000 and paid cash dividends of $15,000,000 to all outstanding stockholders during 2018. Assume all outstanding stock is voting stock. Requirement: 1. Journalize all required 2018 transactions related to West Coast Boats' investment in East Coast Autos. Omit explanations.
On January 1, 2018, West Coast Boats paid $ 1,850,000 for its 30% investment in East Coast Autos. After the purchase, West Coast Boats has significant influence over East Coast Autos. East Coast Autos earned net income of $30,000,000 and paid cash dividends of $15,000,000 to all outstanding stockholders during 2018. Assume all outstanding stock is voting stock. Requirement: 1. Journalize all required 2018 transactions related to West Coast Boats' investment in East Coast Autos. Omit explanations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On January 1, 2018, West Coast Boats paid $ 1,850,000 for its 30% investment in East Coast Autos. After the purchase, West Coast Boats has significant influence over East Coast Autos. East Coast Autos earned net income of $30,000,000 and paid cash dividends of $15,000,000 to all outstanding stockholders during 2018. Assume all outstanding stock is voting stock.
Requirement:
1. Journalize all required 2018 transactions related to West Coast Boats' investment in East Coast Autos. Omit explanations.
Expert Solution
Step 1
Given that:
Investments price = $18,50,000
Net Income = $30,000,000
Dividends paid = $15,000,000
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