Orleans Corporation purchased 1,000,000 shares of Creole Corporation's common stock, which constitutes 10% of Creole's voting stock on June 30, 2014 for $42 per share. Orleans' intent is to keep these shares beyond the current year. On December 20, 2014, Creole paid a $4,000,000 cash dividend. On December 31, 2014, Creole's stock was trading at $45 per share and their reported 2014 net income was $52 million.
Required:
A. Record the transaction to record the acquisition of Creole Corporation on June 30, 2014.
B. Record the transaction for the dividend received by Orleans on December 20, 2014.
C. Record any year-end entries needed by Orleans Corporation.

Question

Quizplus · Accepted Answer

The Answer of Orleans Corporation purchased 1,000,000 shares of Creole Corporation's common stock, which constitutes 10% of Creole's voting stock on June 30, 2014 for $42 per share. Orleans' intent is to keep these shares beyond the current year. On December 20, 2014, Creole paid a $4,000,000 cash dividend. On December 31, 2014, Creole's stock was trading at $45 per share and their reported 2014 net income was $52 million.
Required:
A. Record the transaction to record the acquisition of Creole Corporation on June 30, 2014.
B. Record the transaction for the dividend received by Orleans on December 20, 2014.
C. Record any year-end entries needed by Orleans Corporation.

Orleans Corporation Purchased 1,000,000 Shares of Creole Corporation's Common Stock