On January 1, 2016, Innocente Company purchased 1,000 shares of Entel common stock at $40 per share. Innocente intends to hold this investment for longer than one year. On June 1, 2016, Entel declares and distributes a cash dividend of $0.50 per share. On December 31, 2016, the market price of Entel's stock is $44 per share. On December 31, 2017, the market price of Entel's stock is $46 per share. On February 1, 2018, the Entel's stock is sold for $48 per share. Innocente Company uses a separate allowance account to adjust the investment.
Prepare the journal entries on:
1. January 1, 2016
2. June 1, 2016
3. December 31, 2016
4. December 31, 2017
5. February 1, 2018
Explanations are not required.
Correct Answer:
Verified
Q26: Investments accounted for by the equity method
Q27: A company that owns 40% of the
Q32: Wolverine Corporation owns 27% of Buckeye Corporation.Net
Q34: An investor who may significantly influence the
Q35: Under the equity method,the investor applies his
Q37: Under the equity method,the Equity-method Investment account
Q40: Under the equity method,when the investee reports
Q83: If an investor company owns 35% of
Q85: When the equity method is used to
Q91: The equity method of accounting for a
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents