Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please explain how to solve ASAP. (All answers are correct!) An investor paid $70,200 on January 1, 2018, to acquire 25% of MaverickMan, Inc.'s outstanding

Please explain how to solve ASAP. (All answers are correct!)

An investor paid $70,200 on January 1, 2018, to acquire 25% of MaverickMan, Inc.'s outstanding common stock. The investor had significant control of MaverickMan, Inc. For the year ending December 31, 2018, MaverickMan's net income was $120,000, and on June 14, the company declared and paid cash dividends of $45,000 to all stockholders. Journalize the investor's transactions related to the MaverickMan investment: (a) purchase of the investment, (b) receipt of dividends, (c) investor's share of net income, and (d) sale of MaverickMan stock for $91,550 on January 3, 2019.

image text in transcribed

(a) The investor's purchase of the Maverick-Man investment. Investor paid 70,200 2018 Jan 1 Equity Investments--Maverick-Man Inc 70,200 Cash 70,200 Purchased investment in stock (equity method) b) Journalize receipt of dividends. On June 14, Maverick-Man declared and paid cash dividends of $45,000 2018 Jan 1 Cash 11,250 Equity Investments--Maverick-Man Inc 11,250? Purchased cash dividends (equity method) c) Journalize the investor's share of net income. 2018 Dec 31 Equity Investments--Maverick-Man Inc 30,000 Revenue from Investments 30,000 Recorded revenue earned from investment (equity method) d) Journalize the sale of Maverick-Man stock for 91,550 on January 3, 2019. 2019 Jan 3 Cash 91,550 Equity Investments--Maverick-Man, ind Gain on Disposal Disposed of Investment in stock (equity method) 88,950? 2,600

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Concept Audits A Philosophical Method

Authors: Nicholas Rescher

1st Edition

1498540392, 978-1498540391

More Books

Students also viewed these Accounting questions

Question

Solve the following 1,4 3 2TT 5x- 1+ (15 x) dx 5X

Answered: 1 week ago

Question

c. What groups were least represented? Why do you think this is so?

Answered: 1 week ago