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Juniper Inc. purchased 30,000 of the 90,000 outstanding shares of Yew for $8.70 per share on January 1 of Year 7. The Juniper Inc. controller

Juniper Inc. purchased 30,000 of the 90,000 outstanding shares of Yew for $8.70 per share on January 1 of Year 7. The Juniper Inc. controller believes that their company has significant interest over Yew.

During Year 7, Yew earned a net income of $90,000 and paid dividends of $42,000. On December 31 of Year 7, Yew shares were trading for $9.23.

During Year 8, Yew earned a net income of $111,000 and paid dividends of $54,000. On December 31 of Year 8, Yew shares were trading for $9.88.

Required

Complete the following with the details provided above.

Assuming that Juniper Inc. has significant influence over Yew, prepare all the necessary journal entries for Year 7. (10 marks)

Prepare a schedule that shows all changes to the investment in the Yew account, and include the Year 8 ending balance of the investment account. (10 marks)

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