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On January 1, 2021, Alamar Corporation acquired a 40 percent interest in Burks, Inc., for $210,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $360,000. During 2021, Burks reported net income of $80,000 and declared and paid cash dividends of $25,000. Alamar sold inventory costing $30,000 to Burks during 2021 for $40,000. Burks used all of this merchandise in its operations during 2021. Prepare all of Alamar's 2021 journal entries to apply the equity method to this investment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

On January 1, 2021, Alamar Corporation acquired a 40 percent interest in Burks, Inc., for $210,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $360,000. During 2021, Burks reported net income of $80,000 and declared and paid cash dividends of $25,000. Alamar sold inventory costing $30,000 to Burks during 2021 for $40,000. Burks used all of this merchandise in its operations during 2021. Prepare all of Alamar's 2021 journal entries to apply the equity method to this investment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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View transaction list Journal entry worksheet < 1 2 3 Record the investee dividend declaration. Note: Enter debits before credits. Transaction. 3 Record entry View transaction list 4 Note: Enter debits before credits. Journal entry worksheet < 1 2 3 Transaction. 4 General Journal Record entry Clear entry Record the collection of dividend from investee. 4 General Journal Clear entry Debit Debit Credit View general Journal Credit View general Journal > >
Transcribed Image Text:View transaction list Journal entry worksheet < 1 2 3 Record the investee dividend declaration. Note: Enter debits before credits. Transaction. 3 Record entry View transaction list 4 Note: Enter debits before credits. Journal entry worksheet < 1 2 3 Transaction. 4 General Journal Record entry Clear entry Record the collection of dividend from investee. 4 General Journal Clear entry Debit Debit Credit View general Journal Credit View general Journal > >
On January 1, 2021, Alamar Corporation acquired a 40 percent interest in Burks, Inc., for $210,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $360,000. During 2021, Burks reported net income of $80,000 and declared and paid cash dividends of $25,000. Alamar sold inventory costing $30,000 to Burks during 2021 for $40,000. Burks used all of this merchandise in its operations during 2021. Prepare all of Alamar's 2021 journal entries to apply the equity method to this investment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record the acquisition of a 40 percent interest in Burks. Note: Enter debits before credits. Transaction 1 2 3 4 Record entry View transaction list Journal entry worksheet < 1 2 Transaction 2 General Journal Note: Enter debits before credits. Record entry Clear entry 3 4 Record the 40 percent income earned by Alamar from this investment. General Journal Debit Clear entry Debit Credit View general Journal Credit View general Journal > >
Transcribed Image Text:On January 1, 2021, Alamar Corporation acquired a 40 percent interest in Burks, Inc., for $210,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $360,000. During 2021, Burks reported net income of $80,000 and declared and paid cash dividends of $25,000. Alamar sold inventory costing $30,000 to Burks during 2021 for $40,000. Burks used all of this merchandise in its operations during 2021. Prepare all of Alamar's 2021 journal entries to apply the equity method to this investment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record the acquisition of a 40 percent interest in Burks. Note: Enter debits before credits. Transaction 1 2 3 4 Record entry View transaction list Journal entry worksheet < 1 2 Transaction 2 General Journal Note: Enter debits before credits. Record entry Clear entry 3 4 Record the 40 percent income earned by Alamar from this investment. General Journal Debit Clear entry Debit Credit View general Journal Credit View general Journal > >
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