Harper, Inc., acquires 40 percent of the outstanding voting stock of Kinman Company on January 1, 2020, for $248,800 in cash. The book value of Kinman's net assets on that date was $430,000, although one of the company's buildings, with a $74,800 carrying amount, was actually worth $125,300. This building had a 10-year remaining life. Kinman owned a royalty agreement with a 20-year remaining life that was undervalued by $141,500.

Kinman sold inventory with an original cost of $102,900 to Harper during 2020 at a price of $147,000. Harper still held $20,700 (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 $58,400 net loss and a $20,300 other comprehensive loss for 2020. The company still manages to declare and pay a $11,000 cash dividend during the year.

During 2021, Kinman reported a $48,800 net income and declared and paid a cash dividend of $13,000. It made additional inventory sales of $90,000 to Harper during the period. The original cost of the merchandise was $56,250. All but 30 percent of this inventory had been resold to outside parties by the end of the 2021 fiscal year.

***** The answer to this should be 12 different recorded transactions. They include:

1. Record the initial investment

2. Record Dividend declaration

3. record receipt of dividend

4. Accrual of income and OCI from equity investee

5. Amortization relating to acquisition of Kinman

6. Deferred unrealized gross profit on intra-entity sale

7. Dividend declaration

8. Receipt of Dividend

9. Record 40% accrual of income as earned by equity investee

10. Amortization relating to acquisition of Kinman

11. Record recognized income deferred from 2020.

12. record deferred unrealized gross profit on intra-entity sale