On January 2, 2024, Reynolds Company bought 5% of Ramsey Industry's capital stock for $90 million. Ramsey Industry's net income for the year ended December 31, 2024 was $120 million. The fair value of the shares held by Reynolds was $98 million at December 31, 2024. During 2024, Ramsey declared a dividend of $60 million. 1. Prepare the journal entries related to the investment during 2024. 2. If Reynolds sold the stock on January 2, 2025 for $110 million, what would the journal entry be for Reynolds to record the sale?
On January 2, 2024, Reynolds Company bought 5% of Ramsey Industry's capital stock for $90 million. Ramsey Industry's net income for the year ended December 31, 2024 was $120 million. The fair value of the shares held by Reynolds was $98 million at December 31, 2024. During 2024, Ramsey declared a dividend of $60 million. 1. Prepare the journal entries related to the investment during 2024. 2. If Reynolds sold the stock on January 2, 2025 for $110 million, what would the journal entry be for Reynolds to record the sale?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:On January 2, 2024, Reynolds Company bought 5% of Ramsey Industry's capital stock for $90 million. Ramsey Industry's net income for
the year ended December 31, 2024 was $120 million. The fair value of the shares held by Reynolds was $98 million at December 31,
2024. During 2024, Ramsey declared a dividend of $60 million.
1. Prepare the journal entries related to the investment during 2024.
2. If Reynolds sold the stock on January 2, 2025 for $110 million, what would the journal entry be for Reynolds to record the sale?
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