Net income and dividends using the equity method

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Reference no: EM13824385

As a long-term investment at the beginning of the year, Acquisitions, Inc., purchased 2 million shares (20%) of Takeover Target’s 10 million shares outstanding for $38 million. During the year, Takeover Target earned net income of $7.6 million and distributed cash dividends of $0.36 per share.

Required:

Record for Acquisitions, Inc., the purchase of the investment and its share of Takeover Target’s net income and dividends using the equity method.

Journal Entry Worksheet:

1) Record the purchase of common stock.

2) Record the share of net income.

3) Record the receipt of cash dividends.

Reference no: EM13824385

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