Prepare all of Alamar's 2024 journal entries to apply the equity method to this investment.
Prepare all of Alamar's 2024 journal entries to apply the equity method to this investment.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
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Question
s
![On January 1, 2024, Alamar Corporation acquired a 40 percent interest in Burks, Incorporated, for $210,000. On
that date, Burks's balance sheet disclosed net assets with both a fair and book value of $360,000. During 2024,
Burks reported net income of $80,000 and declared and paid cash dividends of $25,000. Alamar sold inventory
costing $30,000 to Burks during 2024 for $40,000. Burks used all of this merchandise in its operations during
2024.
Required:
Prepare all of Alamar's 2024 journal entries to apply the equity method to this investment.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account
field.
View transaction list
Journal entry worksheet
<
1
2
Transaction
b
3
Note: Enter debits before credits.
Record entry
Record the accrual of 40 percent of the reported earnings of the investee.
4
5
General Journal
Clear entry
< Prev
19 of 22
Debit
Credit
View general journal
Next >
V](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd5eb6217-833c-4d24-896f-a291778fccc6%2Fbc6e97f2-dd58-41b2-85bf-841905780ded%2Fshjrw2_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 1, 2024, Alamar Corporation acquired a 40 percent interest in Burks, Incorporated, for $210,000. On
that date, Burks's balance sheet disclosed net assets with both a fair and book value of $360,000. During 2024,
Burks reported net income of $80,000 and declared and paid cash dividends of $25,000. Alamar sold inventory
costing $30,000 to Burks during 2024 for $40,000. Burks used all of this merchandise in its operations during
2024.
Required:
Prepare all of Alamar's 2024 journal entries to apply the equity method to this investment.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account
field.
View transaction list
Journal entry worksheet
<
1
2
Transaction
b
3
Note: Enter debits before credits.
Record entry
Record the accrual of 40 percent of the reported earnings of the investee.
4
5
General Journal
Clear entry
< Prev
19 of 22
Debit
Credit
View general journal
Next >
V
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