SR Company acquired 40 percent of the voting common shares of DKM,Inc.,on January 1,2001,for $120,000 cash.Income reported and cash dividends declared and paid by DKM in 2001 and 2002 were as follows: $$\begin{array} { | l l l | }
\hline & \text { Income } & \text { Dividends } \
\hline 2001 & \$ 20,000 & \$ 12,000 \
\hline 2002 & ( 5,000 ) & - 0 - \
\hline
\end{array}$$ Give all of the 2001 and 2002 entries other than the acquisition,as they would appear in the accounts of SR.Assume that significant influence exists.
2001 entries:
2002 entries:

Question

SR Company acquired 40 percent of the voting common shares of DKM,Inc.,on January 1,2001,for $120,000 cash.Income reported and cash dividends declared and paid by DKM in 2001 and 2002 were as follows: $$\begin{array} { | l l l | } 
\hline & \text { Income } & \text { Dividends } \
\hline 2001 & \$ 20,000 & \$ 12,000 \
\hline 2002 & ( 5,000 ) & - 0 - \
\hline
\end{array}$$ Give all of the 2001 and 2002 entries other than the acquisition,as they would appear in the accounts of SR.Assume that significant influence exists.
2001 entries:
2002 entries:

Quizplus · Accepted Answer

The Answer of SR Company acquired 40 percent of the voting common shares of DKM,Inc.,on January 1,2001,for $120,000 cash.Income reported and cash dividends declared and paid by DKM in 2001 and 2002 were as follows: $$\begin{array} { | l l l | } 
\hline & \text { Income } & \text { Dividends } \
\hline 2001 & \$ 20,000 & \$ 12,000 \
\hline 2002 & ( 5,000 ) & - 0 - \
\hline
\end{array}$$ Give all of the 2001 and 2002 entries other than the acquisition,as they would appear in the accounts of SR.Assume that significant influence exists.
2001 entries:
2002 entries:

SR Company Acquired 40 Percent of the Voting Common Shares