Question
On January 4, Year 1, Ferguson Company purchased 75,000 shares of Silva Company directly from one of the founders for a price of $43 per
On January 4, Year 1, Ferguson Company purchased 75,000 shares of Silva Company directly from one of the founders for a price of $43 per share. Silva has 300,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $218,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $689,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva.
a. Provide the Ferguson Company journal entries for the transactions involving its investment in Silva Company during Year 1.
| Year 1, Jan. 4 | Investment in Silva Company Stock | ||
| Cash | |||
| Year 1, July 2 | Cash | ||
| Investment in Silva Company Stock | |||
| Year 1, Dec. 31 | Investment in Silva Company Stock | ||
| Income of Silva Company |
b. Determine the December 31, Year 1, balance of Investment in Silva Company Stock. $
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
Data Communications Network Auditing How To Save Hundreds Of Thousands Of Dollars And Still Improve Network Response Time Network Performance And Network Availability
Authors: Bruce Griffis
1st Edition
0936648937, 978-0936648934
