Equity Method}

OBJECTIVE 13 On January 1, 2018, Core Corporation acquired \(30 \%\) of the 10,000 outstanding common shares of Prima Foods Inc. for \(\$ 2,000,000\), which equals the book value of Prima. On December 31, 2018, Prima reported a net profit of \(\$ 400,000\) and declared and paid a total dividend to shareholders of \(\$ 200,000\).

\section*{Required:}

1. Prepare the journal entries made by Core to record the transactions related to its investment in Prima for 2018.

2. Give the title and amount of each item (except cash) on the December 31, 2018, statement of financial position and statement of earnings of Core related to its investments in Prima. Name the section of each financial statement in which each item appears.

\section*{Exercise