Question

As a long-term investment at the beginning of the 2018 fiscal year, Florists International purchased 30% of Nursery Supplies Inc.'s 20 million shares for $63 million. The fair value and book value of the shares were the same at that time. During the year, Nursery Supplies earned net income of $40 million and distributed cash dividends of $1.00 per share. At the end of the year, the fair value of the shares is $59 million Required: Prepare the appropriate journal entries from the purchase through the end of the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in milions, (i.e., 10,000,000 should be entered as 10).) View transaction list Journal entry worksheet 1 2 3 4 Record the investment in Nursery Supplies shares. Note: Enter debits before credits Event General Journal Debit Credit 1

Answer 1

event credit General journal 1 Invetsment in N supplies common stock Cash debit $ 63 $ 63 $ 12 2 Invetsment in N supplies common stock investment revenue ( 40 *30%) $ 12 $ 6 3 cash (20million *30%*1) Invetsment in N supplies common stock $ 6 4 No journal entry required to record change I fair value