Question

7.

Exercise 15-12 Accounting for equity method investments LO P5 Listed below are a few events and transactions of Kodax Company Year 1 Jan. 2 Purchased 30,eee shares of Grecco Co. common stock for $411, ce cash. Grecco has 9,000 shares of common stock outstanding and its activities will be significantly influenced by Kodax Sept. 1 Grecco declared and paid cash dividend of $1.50 per share. Dec. 31 Grecco announced that net incore for the year is $486.000. Year 2 June 1 Grecco declared and paid a cash dividend of 52. 1e per share. Dec. 31 Grecco announced that net income for the year is $702.750. Dec. 31 Kodax sold 3,000 shares of Orecce for $71,000 cash Print Prepare journal entries to record the above transactions and events of Kodax Company (Do not round intermediate calculations and round your final answers to the nearest dollar amount.) References View transaction list Journal entry worksheet Purchased 30,000 shares of Grecco Co. common stock for $411,000 cash Grecco has 90,000 shares of common stock outstanding, and its activities wit be significantly influenced by Kodax Note: Enter debits before credits General Journal Debit Credit Date Jan. 2. Year 11

Answer 1

entries in Journal books of kodax company Date cr or particulars year:) in common stock Alcor & ullooo Jan 2, Investment $4/1000 O to cash Al (being common stock of Grecco purchased for $ 411000) Cash gep: 1 Al or $ 45ooo to dividend income of $ 45000 (being dividend in come = 30000 shalls x $1.50 - $45000 received from Greeco). - 1 റാം 19 ന് Dec 3) $162300 $162300 Investment in common shock Also to profit a loss Ale C being 33-33. (300) prosis of Grecco, tras been credited to PEL Ale of codax (486900X 33.33%)

Date pasticulars debit credit year 2 June) $63000 $ 63000 cash Al or to dividend income ( being dividend of $210 per shall received on . 30000 shales) Dec 31 cash al or $ 7000 $ 41/00 to investment in Common shock (411,000x3000) $29900 to profit & los ale C$ 7005 – $41100) cbeing 3000 shales sold for cash of $71000 se profit sy 29900 recognised) $210825 Dec 3) $210825 Investment in common stock C $ 702750 x 27000) 90000) to profialoval (being profit of Grecto has been appo apportioned to kofax).