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Salinas Corporation acquired 20% of the outstanding common stock of Pebble Beach Corporation on December 31, 2020. The purchase price was $4,200,000 for 100,000 shares.
Salinas Corporation acquired 20% of the outstanding common stock of Pebble Beach Corporation on December 31, 2020. The purchase price was $4,200,000 for 100,000 shares. Pebble Beach Corporation declared and paid a $.95 (cents) per share cash dividend on June 30 and on December 31, 2021. Pebble Beach reported net income of $1,720,000 for 2021. The fair market value of Pebble Beach Corporations stock was $30 per share at December 31, 2021.
- Journal entries need be prepared for Salinas Corporation for 2020 and 2021, assuming Phelps is not able to exercise significant influence over Pebble Beach Corporation.
- Journal entries need be prepared for Salinas Corporation for Salinas Corporation for 2020 and 2021, assuming that Salinas Corporation is able to exercise influence over Pebble Beach Corporation.
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