Oregon Inc. makes an initial investment of $100,000 for 8,000 shares of the voting stock of Bear Claw Corp. 20,000 shares outstanding on January 1, 2020.  In 2020 Bear Claw has earnings of $30,000 and declares and pays dividends of $10,000 on December 31. The market value of Bear Claw Corp. stock is $11.50 per share. Treat each situation below as independent situations.   a - Prepare the necessary journal entries based on the above information. (Hint you should have 3.)   b – Prepare the necessary journal entries based on the above information. Assume that Bear Claw cannot exert significant influence on the operations of Bear Claw Corp. (assume the decline in market value is considered an impairment on the value due to lost market share).

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Oregon Inc. makes an initial investment of $100,000 for 8,000 shares of the voting stock of Bear Claw Corp. 20,000 shares outstanding on January 1, 2020.  In 2020 Bear Claw has earnings of $30,000 and declares and pays dividends of $10,000 on December 31. The market value of Bear Claw Corp. stock is $11.50 per share. Treat each situation below as independent situations.

 

a - Prepare the necessary journal entries based on the above information. (Hint you should have 3.)

 

b – Prepare the necessary journal entries based on the above information. Assume that Bear Claw cannot exert significant influence on the operations of Bear Claw Corp. (assume the decline in market value is considered an impairment on the value due to lost market share). (Hint you should have 3.)

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