Accounting 25th Edition by Carl Warren, James Reeve, Jonathan Duchac

تمرين 3

Equity method
On January 2, Leonberger Company acquired 30% of the outstanding stock of ARO Company for $300,000. For the year ended December 31, ARO Company earned income of $60,000 and paid dividends of $15,000. Prepare the entries for Leonberger Company for the purchase of the stock, the share of ARO income, and the dividends received from ARO Company.
On January 2, Yorkshire Company acquired 40% of the outstanding stock of Fain Company for $500,000. For the year ended December 31, Fain Company earned income of $140,000 and paid dividends of $50,000. Prepare the entries for Yorkshire Company for the purchase of the stock, the share of Fain income, and the dividends received from Fain Company.