On January 1, 2024, Llamar Corporation acquired a 44 percent interest in Burks, Incorporated, for $234,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $343,000. During 2024, Burks reported net income of $77,000 and declared and paid cash dividends of $24,000. Alamar sold inventory costing $21,000 to Burks during 2024 for $41,000. Burks used all of this merchandise in its operations during 2024. Required: Prepare all of Alamar's 2024 journal entries to apply the equity method to this investment. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. 1\Record the acquisition of a 44 percent interest in Burks. 2 Record the accrual of 44 percent of the reported earnings of the investee. 3\Record the investee dividend declaration. 4\Record the collection of dividend from investee. 5\Record the income on intra-entity sale.

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 18E
icon
Related questions
Question
Don't use AI
On January 1, 2024, Llamar Corporation acquired a 44 percent interest in Burks, Incorporated, for $234,000. On that date,
Burks's balance sheet disclosed net assets with both a fair and book value of $343,000. During 2024, Burks reported net
income of $77,000 and declared and paid cash dividends of $24,000. Alamar sold inventory costing $21,000 to Burks
during 2024 for $41,000. Burks used all of this merchandise in its operations during 2024.
Required: Prepare all of Alamar's 2024 journal entries to apply the equity method to this investment. Note: If no entry is
required for a transaction/event, select "No journal entry required" in the first account field.
1\Record the acquisition of a 44 percent interest in Burks.
2 Record the accrual of 44 percent of the reported earnings of the investee.
3\Record the investee dividend declaration.
4\Record the collection of dividend from investee.
5\Record the income on intra-entity sale.
Transcribed Image Text:On January 1, 2024, Llamar Corporation acquired a 44 percent interest in Burks, Incorporated, for $234,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $343,000. During 2024, Burks reported net income of $77,000 and declared and paid cash dividends of $24,000. Alamar sold inventory costing $21,000 to Burks during 2024 for $41,000. Burks used all of this merchandise in its operations during 2024. Required: Prepare all of Alamar's 2024 journal entries to apply the equity method to this investment. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. 1\Record the acquisition of a 44 percent interest in Burks. 2 Record the accrual of 44 percent of the reported earnings of the investee. 3\Record the investee dividend declaration. 4\Record the collection of dividend from investee. 5\Record the income on intra-entity sale.
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
Accounting
ISBN:
9780357391266
Author:
Nellen
Publisher:
Cengage