Saved Help On July 1, 2024, Clearwater Incorporated purchased 9,300 shares of the outstanding common stock of Mountain Corporation at a cost of $213,000. Mountain had 31,000 shares of outstanding common stock. The total book value and total fair value of Mountain's individual net assets on July 1, 2024, are both $710,000. The total fair value of the 31,000 shares of Mountain's common stock on December 31, 2024, is $765,000. Both companies have a January through December fiscal year. The following data pertains to Mountain Corporation during 2024: Dividends declared and paid, January 1-June 30 Dividends declared and paid, July 1-December 31 Net income, January 1-June 30 Net income, July 1-December 31 $ 12,100 $ 12,100 $ 14,100 $ 18,100 5 Required: 1. Prepare the necessary entries for 2024 under the equity method (other than for the purchase). 2. Prepare any necessary entries for 2024 (other than for the purchase) that would be required if the securities were accounted for under the fair value through net income method. Complete this question by entering your answers in the tabs below. Required 1 4 Required 2 Prepare the necessary entries for 2024 under the equity method (other than for the purchase). Note: If no entry is required for a transaction/event, select "No journal entry required" In the first account field. View transaction list 1 Record the entry for cash dividend received under the equity method. EX >
Saved Help On July 1, 2024, Clearwater Incorporated purchased 9,300 shares of the outstanding common stock of Mountain Corporation at a cost of $213,000. Mountain had 31,000 shares of outstanding common stock. The total book value and total fair value of Mountain's individual net assets on July 1, 2024, are both $710,000. The total fair value of the 31,000 shares of Mountain's common stock on December 31, 2024, is $765,000. Both companies have a January through December fiscal year. The following data pertains to Mountain Corporation during 2024: Dividends declared and paid, January 1-June 30 Dividends declared and paid, July 1-December 31 Net income, January 1-June 30 Net income, July 1-December 31 $ 12,100 $ 12,100 $ 14,100 $ 18,100 5 Required: 1. Prepare the necessary entries for 2024 under the equity method (other than for the purchase). 2. Prepare any necessary entries for 2024 (other than for the purchase) that would be required if the securities were accounted for under the fair value through net income method. Complete this question by entering your answers in the tabs below. Required 1 4 Required 2 Prepare the necessary entries for 2024 under the equity method (other than for the purchase). Note: If no entry is required for a transaction/event, select "No journal entry required" In the first account field. View transaction list 1 Record the entry for cash dividend received under the equity method. EX >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On July 1, 2024, Clearwater Incorporated purchased 9,300 shares of the outstanding common stock of Mountain Corporation at a cost
of $213,000. Mountain had 31,000 shares of outstanding common stock. The total book value and total fair value of Mountain's
individual net assets on July 1, 2024, are both $710,000. The total fair value of the 31,000 shares of Mountain's common stock on
December 31, 2024, is $765,000. Both companies have a January through December fiscal year. The following data pertains to
Mountain Corporation during 2024:
Dividends declared and paid, January 1-June 30
Dividends declared and paid, July 1-December 31
Net income, January 1-June 30
Net income, July 1-December 31
$ 12,100
$ 12,100
$ 14,100
$ 18,100
5
Required:
1. Prepare the necessary entries for 2024 under the equity method (other than for the purchase).
2. Prepare any necessary entries for 2024 (other than for the purchase) that would be required if the securities were accounted for
under the fair value through net income method.
Complete this question by entering your answers in the tabs below.
Required 1
4
Required 2
Prepare the necessary entries for 2024 under the equity method (other than for the purchase).
Note: If no entry is required for a transaction/event, select "No journal entry required" In the first account field.
View transaction list
1 Record the entry for cash dividend received under the
equity method.
EX
>
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