On January 1, 2019, Jones Company acquires a 30% interest in Fink Company by purchasing 3,000 of its 10,000 common shares for $16 per share and obtains significant influence. On the date of acquisition, the net assets of Fink were as shown here: Book Value Fair Value Non-depreciable assets (for example, land) $15,000 $25,000 Depreciable assets (10-year remaining life) 90,000 115,000 $105,000 $140,000 Liabilities $10,000 $15,000 During 2019, Fink earned income of $22,000 and paid dividends of $6,000. Required: Prepare all journal entries on Jones’s books to record the acquisition, dividends, and income from the investment in Fink.
On January 1, 2019, Jones Company acquires a 30% interest in Fink Company by purchasing 3,000 of its 10,000 common shares for $16 per share and obtains significant influence. On the date of acquisition, the net assets of Fink were as shown here: Book Value Fair Value Non-depreciable assets (for example, land) $15,000 $25,000 Depreciable assets (10-year remaining life) 90,000 115,000 $105,000 $140,000 Liabilities $10,000 $15,000 During 2019, Fink earned income of $22,000 and paid dividends of $6,000. Required: Prepare all journal entries on Jones’s books to record the acquisition, dividends, and income from the investment in Fink.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2019, Jones Company acquires a 30% interest in Fink Company by purchasing 3,000 of its 10,000 common shares for $16 per share and obtains significant influence. On the date of acquisition, the net assets of Fink were as shown here:
| Book Value | Fair Value | |
| Non- |
$15,000 | $25,000 |
| Depreciable assets (10-year remaining life) | 90,000 | 115,000 |
| $105,000 | $140,000 | |
| Liabilities | $10,000 | $15,000 |
During 2019, Fink earned income of $22,000 and paid dividends of $6,000.
Required:
| Prepare all |
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