5.

Blossom Kenneth Inc. acquired 20\% of the outstanding common stock of Theresa Pharoah Inc. on December 31,2025. The purchase price was $1,305,200 for 50,200 shares. Pharoah Inc. declared and paid an $0.75 per share cash dividend on June 30 and on December 31, 2026. Pharoah reported net income of $763,000 for 2026 . The fair value of Pharoah's stock was $29 per share at December 31,2026 . Assume that the security is a trading security. (a) Prepare the journal entries for Blossom Kenneth Inc. for 2025 and 2026, assuming that Kenneth cannot exercise significant influence over Pharoah. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.) Your answer is correct. Prepare the journal entries for Blossom Kenneth Inc. for 2025 and 2026, assuming that Kenneth can exercise significant influence over Pharoah. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.) At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31,2026 ? What is the total net income reported in 2026 under each of these methods