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Investment in Equity Securities On January 1, 2020, Dallas Company purchased 80,000 shares of Washington Companys $10 par common stock for $42 per share. During
Investment in Equity Securities
On January 1, 2020, Dallas Company purchased 80,000 shares of Washington Companys $10 par common stock for $42 per share. During 2020, Washington paid total dividends of $600,000 and reported net income of $900,000. Washington stock was trading for $44 per share on December 31, 2020. During 2021, Washington paid total dividends of $100,000 and reported net loss of $300,000. Washington stock was trading for $40 per share on December 31, 2021.
Instructions:
- Prepare all necessary journal entries for 2020 and 2021 if Washington has 800,000 shares of common stock outstanding.
- Prepare all necessary journal entries for 2019 and 2020 if Washington has 200,000 shares of common stock outstanding.
- Show calculations
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