Refer to the transactions in Problem C-4B. Assume that although Brinkley owns 25% of Blochs outstanding stock,
Question:
Refer to the transactions in Problem C-4B. Assume that although Brinkley owns 25% of Bloch’s outstanding stock, circumstances indicate that it does not have a significant influence over the investee.
2018
Jan. 5 Brinkley purchased 20,000 shares (25% of total) of Bloch’s common stock for $200,500.
Aug. 1 Bloch declared and paid a cash dividend of $1.05 per share.
Dec. 31 Bloch’s net income for 2018 is $82,000, and the fair value of its stock is $11.90 per share.
2019
Aug. 1 Bloch declared and paid a cash dividend of $1.35 per share.
Dec. 31 Bloch’s net income for 2019 is $78,000, and the fair value of its stock is $13.65 per share.
2020
Jan. 8 Brinkley sold 5% (equal to 1,000 shares) of its investment in Bloch for $12,025 cash.
Required
Prepare journal entries to record these transactions and events for Brinkley.
Common StockCommon 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... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
Journal entries x Assuming NO significant influence 2018 Jan5 Stock Investme...View the full answer
Financial Accounting Information for Decisions
ISBN: 978-1259917042
9th edition
Authors: John J. Wild
