Jaycie Phelps, Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski, Inc. on
January 1, 2007. The purchase price was $1,200,000.00 for 50,000 shares. Kulikowski Inc. declared
and paid an $0.85 per share cash dividend on June 30 and on December 31, 2007. Kulikowski
reported net income of 730,000.00 for 2007. The fair value of Kulikowski's stock was $27.00 per share
at December 31, 2007.
Complete all of the applicable entries for 2007.
Assume that this same transaction only gives Jaycie Phelps, Inc. a 17% ownership.
Complete all of the applicable entries for 2007.