Savan Co. purchased 14,000 Briton Corporation's 40,000 ordinary shares on January 1. This represented 35% of Briton's outstanding shares and gave Savan Co. significant influence over Briton's management and operations. On October 11, Briton declared and paid cash dividends of $30,000. On December 31, Briton reported net income of $125,000 for the year. Prepare the journal entries Savan Co. should record to account for the dividends received and the earnings reported by Briton Corporation.

Question

Quizplus · Accepted Answer

The Answer of Savan Co. purchased 14,000 Briton Corporation's 40,000 ordinary shares on January 1. This represented 35% of Briton's outstanding shares and gave Savan Co. significant influence over Briton's management and operations. On October 11, Briton declared and paid cash dividends of $30,000. On December 31, Briton reported net income of $125,000 for the year. Prepare the journal entries Savan Co. should record to account for the dividends received and the earnings reported by Briton Corporation.

Savan Co Purchased 14,000 Briton Corporation's 40,000 Ordinary Shares on January