On January 1, 2024, Pearl Ltd., a private company, buys 25% of Sugar Maple Candy Company's...

Transcribed Image Text:

On January 1, 2024, Pearl Ltd., a private company, buys 25% of Sugar Maple Candy Company's 168,000 common shares for $403,200. On December 31, 2024, Sugar Maple pays a $29,400 cash dividend and reports profit of $235,200. At December 31, 2024, Sugar Maple's shares are trading at $12.50 per share. Both companies have a December 31 year end. Pearl is able to appoint one board member to Sugar Maple's board of directors and this person has been influential in directing the operations of the company. (a) Record the above transactions assuming Pearl uses the equity method to report its investment in Sugar Maple Candy Company. Darandustele in the far dist On January 1, 2024, Pearl Ltd., a private company, buys 25% of Sugar Maple Candy Company's 168,000 common shares for $403,200. On December 31, 2024, Sugar Maple pays a $29,400 cash dividend and reports profit of $235,200. At December 31, 2024, Sugar Maple's shares are trading at $12.50 per share. Both companies have a December 31 year end. Pearl is able to appoint one board member to Sugar Maple's board of directors and this person has been influential in directing the operations of the company. (a) Record the above transactions assuming Pearl uses the equity method to report its investment in Sugar Maple Candy Company. Darandustele in the far dist