Problemi Equity Method On January 1, 2017, Pennington Corporation purchase of the common shares of Edwards Company for $80,000. During the year, Edwards earned et income of $190,000 and paid dividende of $60,000 Instructions: Read Chapter 2 and prepare the entries for Pennington to record the purchase and any additional entries related to this investment in Edwards Company in 2017 GENERAL JOURNAL PAGE 1 DATE DEBIT DESCRIPTION CREDIT Equity Method An investor maureenuh ownershineck for com m e the exercise of cantinence over the investee come for the investor some direction over corporate solicy and can say the election of the board of directors and other matters of corte Governance and decision making General deemed when one c an owns more than 20% of the stock of the other over he t out the a nce of significant influence remains a matter of woment b on t of acts and Cromstances. Once sonificant influence is present General accented a n d cor re that the vestment be accounted for under the aut h od. This mers from the methods previously discussed, such as these aplicable to trading sect or for sale Securities Mart-au adustments are not where t hodismeloved. In ordes the te c ate investment mot be used to describe hebemode with the equity method, the nor t hequity of the investee That when the investee make money and ex c esa comescondine increase in out the investor wrecords are that and Over The comes recording the investment at cost 04-01-3 To co the purchase of 5.000s of stock 10 persone Legg 20.00 hores outstanding and the investment in Legg 3.000 20.000 the investor significant influence Problemi Equity Method On January 1, 2017, Pennington Corporation purchase of the common shares of Edwards Company for $80,000. During the year, Edwards earned et income of $190,000 and paid dividende of $60,000 Instructions: Read Chapter 2 and prepare the entries for Pennington to record the purchase and any additional entries related to this investment in Edwards Company in 2017 GENERAL JOURNAL PAGE 1 DATE DEBIT DESCRIPTION CREDIT Equity Method An investor maureenuh ownershineck for com m e the exercise of cantinence over the investee come for the investor some direction over corporate solicy and can say the election of the board of directors and other matters of corte Governance and decision making General deemed when one c an owns more than 20% of the stock of the other over he t out the a nce of significant influence remains a matter of woment b on t of acts and Cromstances. Once sonificant influence is present General accented a n d cor re that the vestment be accounted for under the aut h od. This mers from the methods previously discussed, such as these aplicable to trading sect or for sale Securities Mart-au adustments are not where t hodismeloved. In ordes the te c ate investment mot be used to describe hebemode with the equity method, the nor t hequity of the investee That when the investee make money and ex c esa comescondine increase in out the investor wrecords are that and Over The comes recording the investment at cost 04-01-3 To co the purchase of 5.000s of stock 10 persone Legg 20.00 hores outstanding and the investment in Legg 3.000 20.000 the investor significant influence
