On January 1,2019,Presto Corporation purchased,as a long-term investment,5,000 shares of the outstanding voting common stock of Shazam Corporation at $30 per share.During 2019,the following events occurred at Shazam Corporation:
A.Prepare the journal entry for Presto Corporation to record the investment.
B.Assume two independent situations,Case A for 5,000 shares as 10% ownership and Case B for 5,000 shares as 40% ownership.For each situation,prepare the following entries:
1.To recognize net income for 2019.
2.To record cash dividend declared and received.
3.To record any adjustment to market price of stock at year-end.

Question

On January 1,2019,Presto Corporation purchased,as a long-term investment,5,000 shares of the outstanding voting common stock of Shazam Corporation at $30 per share.During 2019,the following events occurred at Shazam Corporation:
  A.Prepare the journal entry for Presto Corporation to record the investment.
B.Assume two independent situations,Case A for 5,000 shares as 10% ownership and Case B for 5,000 shares as 40% ownership.For each situation,prepare the following entries:
1.To recognize net income for 2019.
2.To record cash dividend declared and received.
3.To record any adjustment to market price of stock at year-end.

Quizplus · Accepted Answer

The Answer of On January 1,2019,Presto Corporation purchased,as a long-term investment,5,000 shares of the outstanding voting common stock of Shazam Corporation at $30 per share.During 2019,the following events occurred at Shazam Corporation:
  A.Prepare the journal entry for Presto Corporation to record the investment.
B.Assume two independent situations,Case A for 5,000 shares as 10% ownership and Case B for 5,000 shares as 40% ownership.For each situation,prepare the following entries:
1.To recognize net income for 2019.
2.To record cash dividend declared and received.
3.To record any adjustment to market price of stock at year-end.

On January 1,2019,Presto Corporation Purchased,as a Long-Term Investment,5,000 Shares of the Outstanding