SavedHelpOn July 1, 2024, Clearwater Incorporated purchased 9,300 shares of the outstanding common stock of Mountain Corporation at a costof $213,000. Mountain had 31,000 shares of outstanding common stock. The total book value and total fair value of Mountain'sindividual net assets on July 1, 2024, are both $710,000. The total fair value of the 31,000 shares of Mountain's common stock onDecember 31, 2024, is $765,000. Both companies have a January through December fiscal year. The following data pertains toMountain Corporation during 2024:Dividends declared and paid, January 1-June 30Dividends declared and paid, July 1-December 31Net income, January 1-June 30Net income, July 1-December 31$ 12,100$ 12,100$ 14,100$ 18,1005Required:1. Prepare the necessary entries for 2024 under the equity method (other than for the purchase).2. Prepare any necessary entries for 2024 (other than for the purchase) that would be required if the securities were accounted forunder the fair value through net income method.Complete this question by entering your answers in the tabs below.Required 1 Required 2Prepare the necessary entries for 2024 under the equity method (other than for the purchase).Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.View transaction list1 Record the entry for cash dividend received under theequity method.

Journal entry:The recording of day-to-day business transactions in a journal or books of account is…

On July 1, 2024, Clearwater Incorporated purchased 9,300 shares of the outstanding common stock of Mountain Corporation at a cost of $213,000. Mountain had 31,000 shares of outstanding common stock. The total book value and total fair value of Mountain's individual net assets on July 1, 2024, are both $710,000. The total fair value of the 31,000 shares of Mountain's common stock on December 31, 2024, is $765,000. Both companies have a January through December fiscal year. The following data pertains to Mountain Corporation during 2024: Dividends declared and paid, January 1-June 30 Dividends declared and paid, July 1-December 31 Net income, January 1-June 30 Net income, July 1-December 31 $ 12,100 $ 12,100 $ 14,100 $ 18,100

On July 1, 2024, Clearwater Incorporated purchased 9,300 shares of the outstanding common stock of Mountain Corporation at a cost of $213,000. Mountain had 31,000 shares of outstanding common stock. The total book value and total fair value of Mountain's individual net assets on July 1, 2024, are both $710,000. The total fair value of the 31,000 shares of Mountain's common stock on December 31, 2024, is $765,000. Both companies have a January through December fiscal year. The following data pertains to Mountain Corporation during 2024: Dividends declared and paid, January 1-June 30 Dividends declared and paid, July 1-December 31 Net income, January 1-June 30 Net income, July 1-December 31 $ 12,100 $ 12,100 $ 14,100 $ 18,100

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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