Control Alt Design acquired 30% of the outstanding common stock of Walter Company on January 1, 2012,

Question:

Control Alt Design acquired 30% of the outstanding of Walter Company on January 1, 2012, by paying $800,000 for the 45,000 shares. Walter declared and paid $0.30 per share cash dividends on March 15, June 15, September 15, and December 15, 2012. Walter reported net income of $320,000 for the year. At December 31, 2012, the market price of Walter was $24 per share.
Instructions
(a) Prepare the journal entries for Control Alt Design for 2012 assuming Control Alt Design cannot exercise significant influence over Walter. (Use the cost method and assume that Walter should be classified as a trading security.)
(b) Prepare the journal entries for Control Alt Design for 2012, assuming Control Alt Design can exercise significant influence over Walter. Use the equity method.
(c) Indicate the and income statement account balances at December 31, 2012, under each method of accounting.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...