Significantly Influenced Companies Problem Equity Method On January 1, 2007, Plastor Inc. acquires 20 percent of the outstanding voting shares of Plastee Inc. for $300,000 in cash, a price that was equal to 20 percent of Plastee's net assets. The investment gives Plastor significant influence over Plastee. During the year ending December 31, 2007, Plastee had Net Income of $150,000 and paid dividends of $100,000. In the year ending December 31, 2008, the Company had a net loss of $40,000 and paid dividends of $50,000. For the year ending December 31, 2009, Plastee's Net Income was $90,000 and it paid dividends of $80,000. Provide Plastor's journal entries related to its Investment In Plastee

Significantly Influenced Companies Problem Equity Method On January 1, 2007, Plastor Inc. acquires 20 percent of the outstanding voting shares of Plastee Inc. for $300,000 in cash, a price that was equal to 20 percent of Plastee's net assets. The investment gives Plastor significant influence over Plastee. During the year ending December 31, 2007, Plastee had Net Income of $150,000 and paid dividends of $100,000. In the year ending December 31, 2008, the Company had a net loss of $40,000 and paid dividends of $50,000. For the year ending December 31, 2009, Plastee's Net Income was $90,000 and it paid dividends of $80,000. Provide Plastor's journal entries related to its Investment In Plastee

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 28E

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