On January 6, Year 1, Bulldog Co. purchased 30% of the outstanding stock of Gator Co. for $205,200. Gator Co. paid total dividends of $26,900 to all shareholders on June 30. Gator had a net loss of $52,300 for Year 1.

Required:

A.	Journalize Bulldogs purchase of the stock, receipt of the dividends, and the adjusting entry for the equity loss in Gator Co. stock. Refer to the Chart of Accounts for exact wording of account titles.
B.	Compute the balance of Investment in Gator Co. Stock on December 31, Year 1.
C.	How does valuing an investment under the equity method differ from valuing an investment at fair value?

Journal

a. Journalize Bulldogs purchase of the stock, receipt of the dividends, and the adjusting entry for the equity loss in Gator Co. stock. Refer to the Chart of Accounts for exact wording of account titles.

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JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5		Adjusting Entries
6
7

Final Questions

B. Compute the balance of Investment in Gator Co. Stock on December 31, Year 1.