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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.

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.

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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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.
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