Question
I just posted this question and someone says I need more information but this is all that's given, please help! On January 1, year 3,
I just posted this question and someone says I need more information but this is all that's given, please help!
On January 1, year 3, Belmont enterprises obtained 10,000 (15%) of the shares of Candy Inc. for $280,000. During year 3 Candy reported net income of $145,000 and paid dividends of $40,000. The market price of Candys shares was $30 at the end of year 3.
Belmont was pleased with the investment in Candy and obtained another 20% of the shares of Candy Inc. on January 1, year 4 for $400,000. This new investment gives Belmont significant influence over Candy. Candy reported net income of $180,000 in year 4 and paid dividends of $50,000. The market price of Candys shares at the end of year 4 was $31. Belmont sold the investment in Candys shares on January 2, year 5 for $31 each.
Required:
- Prepare all journal entries required for years 3, 4 and 5.
- Provide the balance of the investment account at the end of year 3 and 4.
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