Problem 15-5A Accounting for long-term investments in stock with significant influence P5 Selk Steel Co., which began operations in Year 1, had the following transactions and events in its long-term investments. Year 1 Jan. 5 Selk purchased 60,000 shares (20% of total) of Kildaire's common stock for $1,560,000. Oct. 23 Kildaire declared and paid a cash dividend of $3.20 per share. Dec. 31 Kildaire's net income for the year is $1,164,000, and the fair value of its stock at December 31 is $30.00 per share. Year 2 Oct. 15 Kildaire declared and paid a cash dividend of $2.60 per share. Dec. 31 Kildaire's net income for the year is $1,476,000, and the fair value of its stock at December 31 is $32.00 per share. Year 3 Jan. 2 Selk sold 3% (equal to 1,800 shares) of its investment in Kildaire for $54,200 cash. Required Prepare journal entries to record these transactions and events for Selk. Assume that Selk has a significant influence over Kildaire with it 20% share of stock.
Problem 15-5A Accounting for long-term investments in stock with significant influence P5 Selk Steel Co., which began operations in Year 1, had the following transactions and events in its long-term investments. Year 1 Jan. 5 Selk purchased 60,000 shares (20% of total) of Kildaire's common stock for $1,560,000. Oct. 23 Kildaire declared and paid a cash dividend of $3.20 per share. Dec. 31 Kildaire's net income for the year is $1,164,000, and the fair value of its stock at December 31 is $30.00 per share. Year 2 Oct. 15 Kildaire declared and paid a cash dividend of $2.60 per share. Dec. 31 Kildaire's net income for the year is $1,476,000, and the fair value of its stock at December 31 is $32.00 per share. Year 3 Jan. 2 Selk sold 3% (equal to 1,800 shares) of its investment in Kildaire for $54,200 cash. Required Prepare journal entries to record these transactions and events for Selk. Assume that Selk has a significant influence over Kildaire with it 20% share of stock.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I am needing help with 15-5A and 16-6A! The second question is based off of the first.
Transcribed Image Text:Problem 15-6A Accounting for long-term investments in stock without significant influence P4
Refer to the transactions in Problem 15-5A. Assume that although Selk owns 20% of Kildaire's outstanding stock, circumstances
indicate that it does not have a significant influence over the investee.
Required
Prepare journal entries to record the preceding transactions and events for Selk.
Transcribed Image Text:Problem 15-5A Accounting for long-term investments in stock with significant influence P5
Selk Steel Co., which began operations in Year I, had the following transactions and events in its long-term investments.
Year 1
Jan. 5 Selk purchased 60,000 shares (20% of total) of Kildaire's common stock for $1,560,000.
Oct. 23 Kildaire declared and paid a cash dividend of $3.20 per share.
Dec. 31 Kildaire's net income for the year is $1,164,000, and the fair value of its stock at December 31 is $30.00 per share.
Year 2
Oct. 15 Kildaire declared and paid a cash dividend of $2.60 per share.
Dec. 31 Kildaire's net income for the year is $1,476,000, and the fair value of its stock at December 31 is $32.00 per share.
Year 3
Jan. 2 Selk sold 3% (equal to 1,800 shares) of its investment in Kildaire for $54,200 cash.
Required
Prepare journal entries to record these transactions and events for Selk. Assume that Selk has a significant influence over Kildaire with its
20% share of stock.
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