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Exercise 17-16 Indigo Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,178,400 for 49,100 shares. Kulikowski Inc. declared and paid an $0.90 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $702,000 for 2021. The fair value of Kulikowski's stock was $27 per share at December 31, 2021. Assume that the security is a trading security. Your answer is partially correct. Try again. Prepare the journal entries for Indigo Inc. for 2020 and 2021, assuming that Indigo cannot exercise significant influence over Kulikowski. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit | Dec. 31, 2020 Equity Investments 1,178,400 Cash 1,178,400 || June 30, 2021 TCash 44,190 PPPPPT Dividend Revenue 44,190 Dec. 31, 2021 Dec. 31, 2021 TCash Cash 44,190 | 44,190 T Dividend Revenue (To record dividend.) (To record dividend.) TFair Value Adjustment Unrealized Holding Gain of (To record fair value.) SHOW LIST OF ACCOUNTS LINK TO TEXT Your answer is partially correct. Try again. Prepare the journal entries for Indigo Inc. for 2020 and 2021, assuming that Indigo can exercise significant influence over Kulikowski. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit | Dec. 31, 2020 TEquity Investments 1,178,4001 T Cash 1,178,400 || June 30, 2021 Tcash 44,190 T Equity Investments 44,190 T( Dec. 31, 2021 TCash 190 T Equity Investments 44,190 (To record dividend.) Equity Investments 140,400 Gain on Sale of Investn 140,400 (To record revenue.) SHOW LIST OF ACCOUNTS LINK TO TEXT Your answer is partially correct. Try again. At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31, 2021? What is the total net income reported in 2021 under each of these methods? Fair Value Method Equity Method 1,230,420 Investment amount (balance sheet) 1,325,700 Dividend revenue (income statement) 88,380 88,380 Your answer is partially correct. Try again. At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31, 2021? What is the total net income reported in 2021 under each of these methods? Fair Value Method Equity Method Investment amount (balance sheet) 1,325,700 1,230,420 Dividend revenue (income statement) 88,380 88,380 Unrealized holding gain (income statement) Investment income (income statement) 140,400