On January 1, 2020, Dallas Company purchased 80,000 shares of Washington Company's $10 par common stock for $42 per share. During 2020, Washington paid total dividends of $600,000 and reported net income of $900,000. Washington stock was trading for $44 per share on December 31, 2020. During 2021, Washington paid total dividends of $100,000 and reported net loss of $300,000. Washington stock was trading for $40 per share on December 31, 2021. Instructions: a. Prepare all necessary journal entries for 2020 and 2021 if Washington has 800,000 shares of common stock outstanding. b. Prepare all necessary journal entries for 2019 and 2020 if Washington has 200,000 shares of common stock outstanding.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On January 1, 2020, Dallas Company purchased 80,000 shares of Washington Company's $10 par common
stock for $42 per share. During 2020, Washington paid total dividends of $600,000 and reported net
income of $900,000. Washington stock was trading for $44 per share on December 31, 2020. During 2021,
Washington paid total dividends of $100,000 and reported net loss of $300,000. Washington stock was
trading for $40 per share on December 31, 2021.
Instructions:
a. Prepare all necessary journal entries for 2020 and 2021 if Washington has 800,000 shares of
common stock outstanding.
b. Prepare all necessary journal entries for 2019 and 2020 if Washington has 200,000 shares of
common stock outstanding.
Transcribed Image Text:On January 1, 2020, Dallas Company purchased 80,000 shares of Washington Company's $10 par common stock for $42 per share. During 2020, Washington paid total dividends of $600,000 and reported net income of $900,000. Washington stock was trading for $44 per share on December 31, 2020. During 2021, Washington paid total dividends of $100,000 and reported net loss of $300,000. Washington stock was trading for $40 per share on December 31, 2021. Instructions: a. Prepare all necessary journal entries for 2020 and 2021 if Washington has 800,000 shares of common stock outstanding. b. Prepare all necessary journal entries for 2019 and 2020 if Washington has 200,000 shares of common stock outstanding.
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