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
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff31446cc-bb57-4f57-9306-d7bf20a51666%2F2ff07ed7-e668-4986-8759-0d6d993d533f%2F9ald6gd_processed.png&w=3840&q=75)
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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