Question

Heidebrecht Design acquired 30% of the outstanding common stock of Quayle Company on January 1, 2015, by paying $822,700 for the 43,300 shares. Quayle declared and paid $0.30 per share cash dividends on March 15, June 15, September 15, and December 15, 2015. Quayle reported net income of $341,800 for the year. At December 31, 2015, the market price of Quayle common stock was $25 per share. Prepare the journal entries for Heidebrecht Design for 2015 assuming Heidebrecht Design cannot exercise significant influence over Quayle. Use the cost method and assume that Quayle common stock should be classified as a trading security. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit

Answer 1

Date 1 anndir . Debid [822700 1-Jan-aoist 1822700 15 March - 2015 12990 Account bittle and explanation Common Shock ale Dr - To Gesh akc. Cash ale Dr. Common Stoele civolantoale Cash alc Dr Common Shocte dividet ale lash al Dr. Common Shicle dinidential 12990 15 June 2015 12990 19990 15-sept - 2015 12990 1299.0 12990 15. Dec - 2015 lesh ale Dr. Common stick denilindale 18990. noks Calculation of divielent. Recephel .. . Number of Shares held2.43300 1. divident per shore a. $0.30 The clinédent per quartere 4330000 130 z 19990 Scanned with CamScanner

Equity muthard 110825oo. 25980o. | Cost methord Shock in westment 822700 Unrealized gain - equity dinident Revenue 51960 Revenue from shocke Investment 31960 51960 102540 NOL o equity muthord Shock inneehand is 43300 x 25 per shore a 1082800. an realized equity 2 1088 700-822700 2859800 Scanned with CamScanner