Question
SandhillInc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,320,800for50,800shares. Kulikowski Inc. declared and
SandhillInc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,320,800for50,800shares. Kulikowski Inc. declared and paid an $0.90per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $755,000for 2021. The fair value of Kulikowski's stock was $29per share at December 31, 2021.
(a)
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Prepare the journal entries for Sandhill Inc. for 2020 and 2021, assuming that Sandhill cannot exercise significant influence over Kulikowski.
(b)
Prepare the journal entries for Sandhill Inc. for 2020 and 2021, assuming that Sandhill can exercise significant influence over Kulikowski.
(c)
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