$1-$ On January $2,2024,$ Sanborn Tobacco Incorporated bought $5\%$ of Jackson Industry$$s capital stock for $$96$ million. Jackson Industry$$s net income for the year ended December $31,2024,$ was $$126$ million. The fair value of the shares held by Sanborn was $$110$ million at December $31,2024.$ During $2024,$ Jackson declared a dividend of $$66$ million.

Part $1$

Required:

$1.$ Prepare all appropriate journal entries related to the investment during $2024.$

A$.$ Record the purchase of Jackson Industry capital stock for $$96$ million.

B$.$ Record Sanborn Tobacco's portion of Jackson Industry's net income of $$126$ million.

C$.$ Record the dividend revenue.

D$.$ Record the fair value adjustment.

On January $2,2024,$ Sanborn Tobacco Incorporated bought $5\%$ of Jackson Industry$$s capital stock for $$96$ million. Jackson Industry$$s net income for the year ended December $31,2024,$ was $$126$ million. The fair value of the shares held by Sanborn was $$110$ million at December $31,2024.$ During $2024,$ Jackson declared a dividend of $$66$ million. Exercise $12-16($Algo$)$ Part $22.$ Assume that Sanborn sold the stock on January $2,2025$ for $$122$ million. Prepare the journal entries Sanborn would use to record the sale.

PART $2$

A$-$ Record the entry to adjust to fair value on the date of sale.

B$-$ Record the sale of stock on January $2,2025$ for $$122$ million.

$2-$ The following information applies to the questions displayed below.$]$

The accounting records of Jamaican Importers, Incorporated, at January $1,2024,$ included the following:

Assets:

Investment in IBM common shares $ $1,995,000$

Less: Fair value adjustment $(210,000)$

$ $1,785,000$

No changes occurred during $2024$ in the investment portfolio

Required:

Prepare appropriate adjusting entry$($s$)$ at December $31,2024,$ assuming the fair value of the IBM common shares was $$1,359,000.$

A$-$ Record the fair value adjustment assuming the fair value of the IBM common shares was $$1,359,000.$

B$-$ Record the fair value adjustment assuming the fair value of the IBM common shares was $$1,810,000.$

C$-$ Record the fair value adjustment assuming the fair value of the IBM common shares was $$2,010,000.$

$3-$ As a long$-$term investment, Painters' Equipment Company purchased $20\%$ of AMC Supplies Incorporated's $490,000$ shares for $$570,000$ at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC$$s net assets were equal. During the year, AMC earned net income of $$340,000$ and distributed cash dividends of $20$ cents per share. At year$-$end, the fair value of the shares is $$604,000.$ Exercise $12-19($Algo$)$ Part $1$ Required: $1.$ Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.

A$-$ Record the purchase of AMC Supplies shares for $$570,000$ as a long$-$term investment.

B$-$ Record Painters' Equipment's share of AMC Supplies' $$340,000$ net income.

C$-$ Record the cash dividend of $20$ cents per share.

D$-$ Record any necessary year$-$end adjusting journal entry when the fair value of the shares held are $$604,000.$

As a long$-$term investment, Painters' Equipment Company purchased $20\%$ of AMC Supplies Incorporated's $490,000$ shares for $$570,000$ at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC$$s net assets were equal. During the year, AMC earned net income of $$340,000$ and distributed cash dividends of $20$ cents per share. At year$-$end, the fair value of the shares is $$604,000.$ Exercise $12-19($Algo$)$ Part $22.$ Assume significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.

PART $2$

A$-$ Record the purchase of AMC Supplies shares for $$570,000$ as a long$-$term investment.

B$-$ Record Painters' Equipment's share of AMC Supplies' $$340,000$ net income.

C$-$ Record the cash dividend of $20$ cents per share.

D$-$ Record any necessary year$-$end adjusting journal entry when the fair value of the shares held are $$604,000$ at year$-$end.