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Harper, Incorporated, acquires 4 0 percent of the outstanding voting stock of Kinman Company on January 1 , 2 0 2 3 , for $

Harper, Incorporated, acquires 40 percent of the outstanding voting stock of Kinman Company on January 1,2023, for $365,700 in
cash. The book value of Kinman's net assets on that date was $760,000, although one of the company's buildings, with a $71,200
carrying amount, was actually worth $111,450. This building had a 10-year remaining life. Kinman owned a royalty agreement with a 20-
year remaining life that was undervalued by $114,000.
Kinman sold inventory with an original cost of $65,100 to Harper during 2023 at a price of $93,000. Harper still held $22,800(transfer
price) of this amount in inventory as of December 31,2023. These goods are to be sold to outside parties during 2024.
Kinman reported a $43,600 net loss and a $27,500 other comprehensive loss for 2023. The company still manages to declare and pay
a $5,000 cash dividend during the year.
During 2024, Kinman reported a $56,400 net income and declared and paid a cash dividend of $7,000. It made additional inventory
sales of $74,000 to Harper during the period. The original cost of the merchandise was $46,250. All but 30 percent of this inventory
had been resold to outside parties by the end of the 2024 fiscal year.
Required:
Prepare all journal entries for Harper for 2023 and 2024 in connection with this investment. Assume that the equity method is applied.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round
intermediate calculations. PLEASE SHOW ALL JOURNAL ENTRY CALCULATIONS!!!!!
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