Turner Company purchased 40% of the outstanding stock of ICA Company for $10,000,000 on January 2, 2016. Turner elects the fair value option to account for the investment. During 2016, ICA earns $750,000 of income and on December 30 pays a dividend of $500,000. On December 31, 2016, the fair value of Turner’s investment has increased to $11,500,000. What journal entries would Turner make to account for this investment during 2016, assuming Turner will account for the investment similar to how it would account for a trading security?
Turner Company purchased 40% of the outstanding stock of ICA Company for $10,000,000 on January 2, 2016. Turner elects the fair value option to account for the investment. During 2016, ICA earns $750,000 of income and on December 30 pays a dividend of $500,000. On December 31, 2016, the fair value of Turner’s investment has increased to $11,500,000. What journal entries would Turner make to account for this investment during 2016, assuming Turner will account for the investment similar to how it would account for a trading security?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Turner Company purchased 40% of the outstanding stock of ICA Company for $10,000,000 on January 2, 2016. Turner elects the fair value option to account for the investment. During 2016, ICA earns $750,000 of income and on December 30 pays a dividend of $500,000. On December 31, 2016, the fair value of Turner’s investment has increased to $11,500,000. What
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