SRK Services acquired 30% of the outstanding common stock of KRK Company on January 1, 2010, by paying $800,000 for the 45,000 shares. KRK declared and paid $0.30 per share cash dividends on March 15, June 15, September 15, and December 15, 2010. KRK reported net income of $320,000 for the year. At December 31, 2010, the market price of KRK common stock was $24 per share.Instructions(a) Prepare the journal entries for SRK Services for 2010 assuming SRK cannot exercise significant influence over KRK.

SRK Services acquired 30% of the outstanding common stock of KRK Company on January 1, 2010, by…

Answered: SRK Services acquired 30% of the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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SRK Services acquired 30% of the outstanding common stock of KRK Company on January 1, 2010, by paying $800,000 for the 45,000 shares. KRK declared and paid $0.30 per share cash dividends on March 15, June 15, September 15, and December 15, 2010. KRK reported net income of $320,000 for the year. At December 31, 2010, the market price of KRK common stock was $24 per share.

Instructions

(a) Prepare the journal entries for SRK Services for 2010 assuming SRK cannot exercise significant influence over KRK.

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