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Return to questi 3 Harper, Inc. acquires 40 percent of the outstanding voting stock of Kinman Company on January 1, 2017, for $341,100 in cash. The book value of Kinman's net assets on that date was $655,000, although one of the company's buildings, with a $65,200 carrying amount, was actually worth $125,450. This building had a 10-year remaining life. Kinman owned a royalty agreement with a 20-year remaining life that was undervalued by $137,500. 33.34 points Kinman sold inventory with an original cost of $107,100 to Harper during 2017 at a price of $153,000. Harper still held $25,050 (transfer price) of this amount in inventory as of December 31, 2017. These goods are to be sold to outside parties during 2018. Kinman reported a $44,000 net loss and a $22,000 other comprehensive loss for 2017. The company still manages to declare and pay a $6,000 cash dividend during the year. During 2018, Kinman reported a $47,400 net income and declared and paid a cash dividend of $8,000. It made additional inventory sales of $76,000 to Harper during the period. The original cost of the merchandise was $47,500. All but 30 percent of this inventory had been resold to outside parties by the end of the 2018 fiscal year. Prepare all journal entries for Harper for 2017 and 2018 in connection with this investment. Assume that the equity method is applied. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) No Date General Journal Debit Credit 1 01/01/2017 Investment in Kinman Co. 341,100 Cash 341,100 2 12/31/2017 Dividends receivable 2,400 Investment in Kinman Co. 2,400 3 12/31/2017 Cash 2,400 Dividends receivable 2,400 AL 12/31/2017 Equity in Kinman income Other comprehensive loss of Kinman Investment in Kinman Co. 17,600 8,800 26,400 5 12/31/2017 2,650 X Equity in Kinman income Investment in Kinman Co. 2,650 6 12/31/2017 x 4,500 X Investment in Kinman Co. Equity in Kinman income x 4,500 7 12/31/2018 3,200 Dividends receivable Investment in Kinman Co. 3,200 8 12/31/2018 Cash 3,200 Dividends receivable 3,200 9 12/31/2018 18,960 Investment in Kinman Co. Equity in Kinman income 18,960 10 12/31/2018 4,000 X Equity in Kinman income Investment in Kinman Co. 4,000 11 12/31/2018 1,100 Investment in Kinman Co. Equity in Kinman income 1,100 10 12/31/2018 4,000 X Equity in Kinman income Investment in Kinman Co. 4,000 11 12/31/2018 1,100 Investment in Kinman Co. Equity in Kinman income 1,100 x 12 12/31/2018 1,350 X Equity in Kinman income Investment in Kinman Co. 1,350