Name

Question $1$: On January $1,2022,$ Coyote Corporation purchased $30\%$ of the common

shares of Roadrunner Limited for $$860,000.$ On that date, the shareholder's equity of

Roadrunner was $$1,000,000$ in common shares and $$1,100,000$ in retained earnings. All

the net assets for Roadrunner had fair values equal to their book values except for:

Building $($remaining $5-$year life$)$

Fair value

$$1,500,000$

Book value

$$1,300,000$

The following related to Roadrunner since the acquisition date:

Year

$2022$

$2023$

Net Income

$$400,000$

$$170,000$

Dividends paid

$$210,000$

$$190,000$

In $2023,$ there was a goodwill impairment loss equal to $20\%$ of its balance.

Required: Prepare all the journal entries that Coyote should make regarding its

investment in Roadrunner, for $2022$ and $2023.$ Show its amount on the balance sheet as of

year end $2023.$

Journal entries $-2022$

Jan. $1$

Dec. $31$

Dec. $31$

Dec. $31$

Journal entries $-2023$

Dec. $31$

Dec. $31$

Dec. $31$

Investment amount $($balance sheet$),2023$ year$-$end