On January 1, 2024, Alamar Corporation acquired a 41 percent interest in Burks, Incorporated, for $233,000. On that date, Burkss balance sheet disclosed net assets with both a fair and book value of $320,000. During 2024, Burks reported net income of $82,000 and declared and paid cash dividends of $28,000. Alamar sold inventory costing $25,000 to Burks during 2024 for $35,000. Burks used all of this merchandise in its operations during 2024.

Required:

Prepare all of Alamars 2024 journal entries to apply the equity method to this investment.

1. Record the acquisition of a 41 percent interest in Burks.

2. Record the accrual of 41 percent of the reported earnings of the investee.

3. Record the investee dividend declaration.

4. Record the collection of dividend from investee.

5. Record the income on intra-entity sale.