Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On January 1, 2017, Fisher Corporation purchased 40 percent (78,000 shares) of the common stock of Bowden, Inc. for $982,000 in cash and began to
On January 1, 2017, Fisher Corporation purchased 40 percent (78,000 shares) of the common stock of Bowden, Inc. for $982,000 in cash and began to use the equity method for the investment. The price paid represented a $60,000 payment in excess of the book value of Fisher's share of Bowden's underlying net assets. Fisher was willing to make this extra payment because of a recently developed patent held by Bowden with a 15-year remaining life. All other assets were considered appropriately valued on Bowden's books Bowden declares and pays a $94,000 cash dividend to its stockholders each year on September 15. Bowden reported net income of $408,000 in 2017 and $356,000 in 2018. Each income figure was earned evenly throughout its respective year On July 1,2018, Fisher sold 10 percent (19,500 shares) of Bowden's outstanding shares for $328,000 in cash. Although it sold this interest, Fisher maintained the ability to significantly influence Bowden's decision-making process Prepare the journal entries for Fisher for the years of 2017 and 2018. (If no entry is required for a transaction/event,select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar.) View transaction list Journal entry worksheet Record cost of 78,000 shares of Bowden Company. Note: Enter debits before credits. Date General Journal DebitCredit 01/01/2017
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started