Zoop Corporation purchased for 300,000 a 30% interest in Murphy, Inc.
Brief Exercise 17-07
Zoop Corporation purchased for 300,000 a 30% interest in Murphy, Inc. This investment enables Zoop to exert significant influence over Murphy. During the year, Murphy earned net income of $180,000 and paid dividends of $60,000.
Prepare Zoop's journal entries related to this investment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.)
Homework Answers
Ans:
| Account Titles | Debit | Credit |
| Equity Investment | $300, 000 | |
| Cash | $300,000 | |
| Equity investment (180000*30%) | 54000 | |
| Revenue from investment | 54000 | |
| Cash (60000*30%) | 18000 | |
| Equity investment | 18000 |
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Zoop Corporation purchased for 300,000 a 30% interest in Murphy, Inc.
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when amount is entered. Do not indent manually. If no entry is
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