Answer:
Year 1
Jan. 2 Purchased 82,000 shares of Grecco Co. common stock for $546,000 cash. Grecco has 246,000 shares of common stock outstanding, and its activities will be significantly influenced by Kodax.
Dr Investment in Grecco Co. 546,000
Cr Cash 546,000
Sept. 1 Grecco declared and paid a cash dividend of $1.30 per share.
Dr Cash 106,600
Cr Investment in Grecco Co. 106,600
Dec. 31 Grecco announced that net income for the year is $510,900.
Dr Investment in Grecco Co. 170,300
Cr Revenue from investment in Grecco Co. 170,300
Year 2
June 1 Grecco declared and paid a cash dividend of $3.20 per share.
Dr Cash 262,400
Cr Investment in Grecco Co. 262,400
Dec. 31 Grecco announced that net income for the year is $740,400.
Dr Investment in Grecco Co. 246,800
Cr Revenue from investment in Grecco Co. 246,800
Dec. 31 Kodax sold 13,000 shares of Grecco for $99,500 cash.
each share is worth = $7.2695
Dr Cash 99,500
Cr Investment in Grecco Co. 94,504
Cr Gain from investment in Grecco Co. 4,996
