Required information

Skip to question

[The following information applies to the questions displayed below.]

Selk Steel Company, which began operations in Year 1, had the following transactions and events in its long-term investments.

Year 1

January 5 Selk purchased 65,000 shares (20% of total) of Kildaire's common stock for $1,495,000.

October 23 Kildaire declared and paid a cash dividend of $3.90 per share.

December 31 Kildaires net income for the year is $1,194,000, and the fair value of its stock at December 31 is $31 per share.

Year 2

October 15 Kildaire declared and paid a cash dividend of $3.00 per share.

December 31 Kildaires net income for the year is $1,161,000, and the fair value of its stock at December 31 is $34 per share.

Year 3

January 2 Selk sold 5% (equal to 3,250 shares) of its investment in Kildaire for $81,000 cash.

Required:

Prepare journal entries to record these transactions and events for Selk. Assume that Selk has a significant influence over Kildaire with its 20% share of stock.

Selk sold 5% (equal to 3,250 shares) of its investment in Kildaire for $81,000 cash.

Selk sold 5% (equal to 3,250 shares) of its investment in Kildaire for $81,000 cash. Required information [The following information applies to the questions displayed below.] Selk Steel Company, which began operations in Year 1, had the following transactions and events in its long-term Investments. Year 1 January 5 Selk purchased 65,000 shares (208 of total) of Kildaire's comson stock for $1,495,000. october 23 Kildaire dectared and paid a cash dividend of $3.90 per share. Decenber 31 Kildaire's net income for the year is $1,194,000, and the fair value of its stock at Decenber 31 is $31 per share. Year 2 October 15 Kildaire declared and paid a cash dividend of $3.00 per share. December 31 Kitdaire's net income for the year is $1,161,000, and the fair value of its stock at Decenber 31 is $34 per share. Year 3 fanuary 2 Selk sold 54 (equal to 3,250 shares) of its investment in Kitdaire for $81,000 cash. Required: Prepare journal entries to record these transactions and events for Selk. Assume that Selk has a significant influence over Kildaire with its 20% share of stock