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Exercise 22-23 vestment account tad the Metock Corp. was a 30% owner of Bonita Company holding 210,000 shares of Bonitas common stock on December 31
Exercise 22-23 vestment account tad the Metock Corp. was a 30% owner of Bonita Company holding 210,000 shares of Bonitas common stock on December 31 2016 The following entries Investment in Bonita 1/1/15 Cost 12/31/15 Share of income 12/31/16 Share of income $3,160,000 12/6/15 Dividend received $150,000 380,000 12/5/16 Dividend received 520,000 230,000 On January 2, 2017, Metlock sold 126,000 shares of Bonita for $3,500,000, thereby losing its significant influence. During the year 2017, Bonita experienced the following results of operations and paid the following dividends to Metlock. Bonita Income (Loss) Dividends Paid to Metlock $49,000 2017 At December 31, 2017, the fair value of Bonita shares held by Metlock is $1,500,000. This is the first reporting date since the January 2 sale. (b) Compute the carrying amount of the investment in Bonita as of December 31, 2017 (prior to any fair value adjustment) Carrying amount $290,000 (c) Prepare the adjusting entry on December 31, 2017, applying the fair value method to Metlock's long-term investment in Bonita Company securities. (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.)
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