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On January 1, 2015, Lowe Company purchased 20,000 of the 100,000 outstanding common shares of Guzman Company for $10 per share. During the year, Guzman

On January 1, 2015, Lowe Company purchased 20,000 of the 100,000 outstanding common shares of Guzman Company for $10 per share. During the year, Guzman Company declared net income of $400,000 and paid $50,000 of dividends. On December 31, 2015, Guzman Companys stock had a fair value of $13 per share.

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Prepare all necessary entries, assuming that Lowe Company is able to exert significant influence over Guzman Company.

Prepare all necessary entries, assuming that Lowe Company is NOT able to exert significant influence over Guzman Company.

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