Turner Company purchased 40% of the outstanding stock of ICA Company for $10,000,000 on January 2, 2021.

Question:

Turner Company purchased 40% of the outstanding stock of ICA Company for $10,000,000 on January 2, 2021. Turner elects the fair value option to account for the investment. During 2021, ICA reports $750,000 of net income and on December 30 pays a dividend of $500,000. On December 31, 2021, the fair value of Turner’s investment has increased to $11,500,000. What journal entries would Turner make to account for this investment during 2021, assuming Turner will account for the investment using the fair value through net income approach?

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...

Fantastic news! We've Found the answer you've been seeking!