Question
Investment in Common Stock-Fair Value Less than Book Value JJJ Inc. purchased 35% of ABC Co. on January 4, 2,013, for $280,000 when ABCs book
Investment in Common Stock-Fair Value Less than Book Value
JJJ Inc. purchased 35% of ABC Co. on January 4, 2,013, for $280,000 when ABCs book value was $810,000. On that day, the fair value of the net assets of ABC equaled their book values with the following exceptions:
Book | Fair Value | |
Equipment | $175,000 | $140,000 |
Buildings | $40,000 | $65,000 |
The equipment has a remaining useful life of 10 years, and the building has a remaining useful life of 20 years. ABC reported the following related to operations for 2,013 and 2,014:
Net income (loss) | Dividends | |
2013 | $80,000 | $15,000 |
2014 | ($10,000) | $8,000
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Provide the entries made by JJJ Inc. relating to its investment in ABC for the year 2,013. Round to the nearest dollar.
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Provide the entries made by JJJ Inc. relating to its investment in ABC for the year 2,014. Round to the nearest dollar.
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