19 Harper, Inc., acquires 40 percent of the outstanding voting stock of Kinman Company on January 1, 2020, for $334,900 in cash. The book value of Kinman's net assets on that date was $625.000, although one of the company's buildings, with a $70,800 carrying amount, was actually worth $135,550. This building had a 10-year remaining life. Kinman owned a royalty agreement with a 20-year remaining life that was undervalued by $147,500. Kinman sold inventory with an original cost of $77,700 to Harper during 2020 at a price of $.29,000. Harper still held $18,750 (transfer price) of this amount in inventory as of December 31, 2020. These goods are to be sold to outside parties during 2021. Kinman reported a $51,800 net loss and a $26,600 other comprehensive loss for 2020. The company still manages to declare and pay a $15,000 cash dividend during the year. During 2021, Kinman reported a $57,200 net income and declared and paid a cash dividend of $17.000. It made additional inventory sales of $120,000 to Harper during the period. The original cost of the merchandise was $75,000. All but 30 percent of this inventory had been resold to outside parties by the end of the 2021 fiscal year. Prepare all journal entries for Harper for 2020 and 2021 in connection with this investment. Assume that the equity method is applied. (if no entry is required for a transaction/event, select "No journal entry required in the first account field. Do not round intermediate calculations.) View transaction list View journal entry worksheet BE View transaction list View journal entry worksheet No Date Debit General Journal Investment in Kinman Co. Credit 1 01/01/2020 334,900 Cash 334,900 2 12/31/2020 6,000 Dividends receivable Investment in Kinman Co. 6,000 3 12/31/2020 6,000 Cash Dividends receivable 6,000 4 12/31/2020 Equity in Investee income Other comprehensive loss of Kinman Investment in Kinman Co. 20,720 10,640 31,360 5 12/31/2020 Equity in investee income Investment in Kinman Co. 6 12/31/2020 Equity in Investee income Investment in Kinman Co. 6 12/31/2020 Equity in Investee income Investment in Kinman Co. 7 12/31/2021 Dividends receivable Investment in Kinman Co. 6,800 6,800 B 8 12/31/2021 Cash Dividends receivable 9 12/31/2021 Investment in Kinman Co. Equity in Investee income 10 12/31/2021 Equity in Investee income Investment in Kinman Co. 11 12/31/2021 Investment in Kinman Co. Equity in Investee income 12 12/31/2021 Equity in Investee income Investment in Kinman Co. 1 CH Harper, Inc., acquires 40 percent of the outstanding voting stock of Kinman Company on January 1, 2020, for $334,900 in cash. The book value of Kinman's net assets on that date was $625,000, although one of the company's buildings, with a $70,800 carrying amount, was actually worth $135,550. This building had a 10-year remaining life. Kinman owned a royalty agreement with a 20-year remaining life that was undervalued by S147,500 Kinman sold inventory with an original cost of $77,700 to Harper during 2020 at a price of $111.000. Harper still held 518,750 (transfer price) of this amount in inventory as of December 31, 2020. These goods are to be sold to outside parties during 2021 Kinman reported a $51.800 net loss and a $26,600 other comprehensive loss for 2020. The company still manages to declare and pay a $15,000 cash dividend during the year. During 2021, Kinman reported a $57,200 net income and declared and paid a cash dividend of S17.000. It made additional inventory sales of $120,000 to Harper during the period. The original cost of the merchandise was $75,000. All but 30 percent of this inventory had been resold to outside parties by the end of the 2021 fiscal year. Prepare all journal entries for Harper for 2020 and 2021 in connection with this investment. Wissume that the equity method is applied. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) View transaction list View journal entry worksheet No Date Credit General Journal Investment in Kinman Co. Debit 334,900 1 01/01/2020 Cash 334.900