Solution-Prepare the necessary entries for under the equity

Prepare the necessary entries for under the equity method

Assignment Help Financial Accounting

Reference no: EM132667289

On July 1, 2021 Yellowstone Co. purchase7250 shares of he outstanding common stock of Clack Co. at a cost of 172,500. Clack had 29,000 shares of outstanding common stock. The total book value and total fair value of Clack individual net assets in July1, 2021 are both $690,00. The total fair value of the 29,000 shares of Clack common stock om December 31, 2021 is 755,000. Both companies have a January to December fiscal year.

The following data is for the Clack Co. during 2021

Dividends declared and paid, January 1, to June 30 $11.900

Dividends declared and paid, July 1, to December 31, $11.900

Net income, Jan 1 to June 30 $13,900

Net income, July 1, to December 31 $17,900

Problem a: Prepare the necessary entries for 2021 under the equity method

1 Record the entry for cash dividend received
2 Record the entry for investment revenue
3 Record the unrealized gain of loss for the securities available for sale

Reference no: EM132667289

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Prepare the necessary entries for under the equity method

Reference no: EM132667289

Reference no: EM132667289

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