Wildhorse Corporation purchased 22,000 shares of common stock, a 22% interest, of the Sherman Corporation for...
Wildhorse Corporation purchased 22,000 shares of common stock, a 22% interest, of the Sherman Corporation for $37 per share on January 1, 2020, spending a total of $814,000 on the investment. The investment enabled Wildhorse to exert significant influence over Sherman. Sherman Corporation had 100,000 shares of common stock outstanding during 2021, paid cash dividends of $147,000 during 2021, and reported net income of $470,000 for 2021.
The balance in Wildhorse Corporation's "Equity Investments" account for 2021 should be:
Hint: Use a t-chart for Equity Investments.
Homework Answers
| Amount paid for investment | 814000 | |
| Add: Share of net income | 103400 | =470000*22% |
| Less: Dividends paid | (32340) | =147000*22% |
| Balance in "Equity Investments" account for 2021 | 885060 |
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Corporation common stock for $1350000 as an equity investment. The
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