On January 1,2015,Bactin Corporation acquired 10% of Oakton Company for $100,000.On that date,the total book value and fair value of Oakton's net assets was $900,000.Any difference between cost and fair value is attributable to goodwill.In 2015,Oakton reported net income of $60,000 and paid dividends of $30,000.On January 1,2016,Bactin Corporation bought another 10% of Oakton for $100,000,and on that date,the book value and fair value of Oakton's net assets still was $900,000 (the fair value of Oakton did not change during 2015).Bactin concluded that its 20% ownership now allowed it to significantly influence Oakton's operations.In 2016,Oakton reported net income of $80,000 and paid dividends of $40,000.
Required:
Prepare all journal entries for Bactin for 2015 and 2016,assuming no change in fair value of the Oakton stock during that time period.

Question

Quizplus · Accepted Answer

The Answer of On January 1,2015,Bactin Corporation acquired 10% of Oakton Company for $100,000.On that date,the total book value and fair value of Oakton's net assets was $900,000.Any difference between cost and fair value is attributable to goodwill.In 2015,Oakton reported net income of $60,000 and paid dividends of $30,000.On January 1,2016,Bactin Corporation bought another 10% of Oakton for $100,000,and on that date,the book value and fair value of Oakton's net assets still was $900,000 (the fair value of Oakton did not change during 2015).Bactin concluded that its 20% ownership now allowed it to significantly influence Oakton's operations.In 2016,Oakton reported net income of $80,000 and paid dividends of $40,000.
Required:
Prepare all journal entries for Bactin for 2015 and 2016,assuming no change in fair value of the Oakton stock during that time period.

On January 1,2015,Bactin Corporation Acquired 10% of Oakton Company for $100,000.On