On 1/18/20 , Ehrlich Inc. purchased 25,000 shares of the common stock of ABC Co. for $15
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Question:
On 1/18/20, Ehrlich Inc. purchased 25,000 shares of the common stock of ABC Co. for $15 per share. Ehrlich's ownership represents 5% of ABC's total shares.
On 6/15/20, ABC Co. paid dividends of $2.50 a share.
On 12/31/20, the fair market value of the ABC stock was $19 a share.
Instructions:
Prepare the 3 journal entries that Ehrlich would make during 2020 to account for its investment
AND determine the amount of the investment in ABC that would be shown on the balance sheet at 12/31/20.
Expert Answer:
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