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On March 31, 2021, Chow Brothers, Inc., bought 6% of KT Manufac ended December 31, 2021, was $81.6 million. The fair value of the did not declare or pay a dividend during 2021. Required: 1. Prepare all appropriate journal entries related to the investment

On March 31, 2021, Chow Brothers, Inc., bought 6% of KT Manufac ended December 31, 2021, was $81.6 million. The fair value of the did not declare or pay a dividend during 2021. Required: 1. Prepare all appropriate journal entries related to the investment

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 March 31, 2021, Chow Brothers, Inc., bought 6% of KT Manufacturing's capital stock for $54.8 million. KT's net income for the year ended December 31, 2021, was $81.6 million. The fair value of the shares held by Chow was $38.2 million at December 31, 2021. KT did not declare or pay a dividend during 2021. Required: 1. Prepare all appropriate journal entries related to the investment during 2021. 2. Assume that Chow sold the stock on January 20, 2022, for $31.6 million. Prepare the journal entries to record the sale. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare all appropriate journal entries related to the investment during 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).). No 1 > Answer is complete but not entirely correct. 2 Date March 31, 2021 General Journal Investment in equity securities Cash December 31, 202 No journal entry required ✔✓ ✓ > Debit 54.5 X Credit 54.5 x
Transcribed Image Text:On March 31, 2021, Chow Brothers, Inc., bought 6% of KT Manufacturing's capital stock for $54.8 million. KT's net income for the year ended December 31, 2021, was $81.6 million. The fair value of the shares held by Chow was $38.2 million at December 31, 2021. KT did not declare or pay a dividend during 2021. Required: 1. Prepare all appropriate journal entries related to the investment during 2021. 2. Assume that Chow sold the stock on January 20, 2022, for $31.6 million. Prepare the journal entries to record the sale. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare all appropriate journal entries related to the investment during 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).). No 1 > Answer is complete but not entirely correct. 2 Date March 31, 2021 General Journal Investment in equity securities Cash December 31, 202 No journal entry required ✔✓ ✓ > Debit 54.5 X Credit 54.5 x
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