On January 1, 2023, Evans Company purchased 40% of Farley Corporation’s 800,000 outstanding shares of common stock at a cost of $35 per share. On July 15, Farley declared and paid a cash dividend of $1.50 per share. On December 31, Farley reported a net income of $2,860,000 for the year and the market price of its common stock was $42 per share. Prepare all journal entries for 2023.
On January 1, 2023, Evans Company purchased 40% of Farley Corporation’s 800,000 outstanding shares of common stock at a cost of $35 per share. On July 15, Farley declared and paid a cash dividend of $1.50 per share. On December 31, Farley reported a net income of $2,860,000 for the year and the market price of its common stock was $42 per share. Prepare all journal entries for 2023.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
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Question
Part A
Clark Company acquired 15% of the 500,000 shares of common stock of Davis Company at a total cost of
$25.75 per share on June 1, 2022. On October 1, Davis Company declared and paid a $50,000 cash dividend.
On December 31, Davis Company stock had a market price of $27.00 per share and the company reported net
income of $1,250,000 for the year. The securities are classified as available-for-sale.
Prepare alljournal entries for 2022.
Clark Company acquired 15% of the 500,000 shares of common stock of Davis Company at a total cost of
$25.75 per share on June 1, 2022. On October 1, Davis Company declared and paid a $50,000 cash dividend.
On December 31, Davis Company stock had a market price of $27.00 per share and the company reported net
income of $1,250,000 for the year. The securities are classified as available-for-sale.
Prepare all
Part B
On January 1, 2023, Evans Company purchased 40% of Farley Corporation’s 800,000 outstanding shares of
common stock at a cost of $35 per share. On July 15, Farley declared and paid a cash dividend of $1.50 per
share. On December 31, Farley reported a net income of $2,860,000 for the year and the market price of its
common stock was $42 per share.
Prepare all journal entries for 2023.
I only need part B.
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