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On March 31, 2021, Chow Brothers, Inc., bought 7% of KT Manufacturing's capital stock for $52.7 million. KT's net income for the year ended December 31, 2021, was $80.9 million. The fair value of the shares held by Chow was $36.8 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 $30.9 million. Prepare the journal entries to record the sale.

On March 31, 2021, Chow Brothers, Inc., bought 7% of KT Manufacturing's capital stock for $52.7 million. KT's net income for the year ended December 31, 2021, was $80.9 million. The fair value of the shares held by Chow was $36.8 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 $30.9 million. Prepare the journal entries to record the 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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i Saved or Not to Be Help Sav On March 31, 2021, Chow Brothers, Inc., bought 7% of KT Manufacturing's capital stock for $52.7 million. KT's net income for the year ended December 31, 2021, was $80.9 million. The fair value of the shares held by Chow was $36.8 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 $30.9 million. Prepare the journal entries to record the sale.
Transcribed Image Text:i Saved or Not to Be Help Sav On March 31, 2021, Chow Brothers, Inc., bought 7% of KT Manufacturing's capital stock for $52.7 million. KT's net income for the year ended December 31, 2021, was $80.9 million. The fair value of the shares held by Chow was $36.8 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 $30.9 million. Prepare the journal entries to record the sale.
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