Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Cheyenne Co. acquired 25% of the 520,000 shares of outstanding common stock of Overload Inc. on December 31, 2020. The purchase price was $3,705,000. Overload
Cheyenne Co. acquired 25% of the 520,000 shares of outstanding common stock of Overload Inc. on December 31, 2020. The purchase price was $3,705,000. Overload declared and paid $1.10 per share cash dividends on June 18, 2021, and on November 29, 2021. Overload reported net income of $1,290,000 for 2021. The fair value of Overload common stock was $27 per share at December 31, 2021. (a) Your answer is partially correct. Prepare the journal entries for Cheyenne Co. for 2021, assuming that Cheyenne cannot exercise significant influence over Overload. The securities should be classified as available- for-sale. (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 O for the amounts.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started