Exercise 4-7 On January 1, 2014, Pert Company purchased 85% of the outstanding common stock of Sales Company for $370,400. On that date, Sales Companys stockholders equity consisted of common stock, $100,600; other contributed capital, $41,200; and retained earnings, $141,900. Pert Company paid more than the book value of net assets acquired because the recorded cost of Sales Companys land was significantly less than its fair value. During 2014 Sales Company earned $156,700 and declared and paid a $48,800 dividend. Pert Company used the partial equity method to record its investment in Sales Company. Assume that during 2015 Sales Company earned $206,600 and declared and paid a $48,800 dividend.

(a)

	Your answer is partially correct. Try again.

Prepare the investment-related entries on Pert Companys books for 2015. (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.)

Account Titles and Explanation	Debit	Credit
(To record equity income (loss))
(To record dividend income)

SHOW LIST OF ACCOUNTS

LINK TO TEXT

Attempts: 1 of 5 used

SAVE FOR LATER

SUBMIT ANSWER

(b) The parts of this question must be completed in order. This part will be available when you complete the part above.

Exercise 4-7 On January 1, 2014, Pert Company purchased 85% of the outstanding common stock of Sales Company for $370,400. On that date, Sales Company's stockholders' equity consisted of common stock, $100,600; other contributed capital, $41,200; and retained earnings, $141,900. Pert Company paid more than the book value of net assets acquired because the recorded cost of Sales Company's land was significantly less than its fair value. During 2014 Sales Company earned $156,700 and declared and paid a $48,800 dividend. Pert Company used the partial equity method to record its investment in Sales Company. Assume that during 2015 Sales Company earned $206,600 and declared and paid a $48,800 dividend. (a) Your answer is partially correct. Try again. Prepare the investment-related entries on Pert Company's books for 2015. (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.) Account Titles and Explanation Debit Credit Investment in Subsidiary X Cash (To record equity income (loss)) x Cash X Equity Income (To record dividend income) SHOW LIST OF ACCOUNTS LINK TO TEXT Attempts: 1 of 5 used SAVE FOR LATER SUBMIT ANSWER (b) The parts of this question must be completed in order. This part will be available when you complete the part above