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ddd [48]
3 years ago
7

g On January 2, Yorkshire Company acquired 34% of the outstanding stock of Fain Company for $400,000. For the year ended Decembe

r 31, Fain Company earned income of $104,000 and paid dividends of $32,000. Prepare the entries for Yorkshire Company for the purchase of the stock, the share of Fain income, and the dividends received from Fain Company.
Business
1 answer:
bija089 [108]3 years ago
3 0

Answer:

See the explanation below:

Explanation:

Share of profit of Fain Company = $104,000 * 34% = $35,350

Dividend received = $32,000 * 34% = $10,880

<u>Date             Details                                                 Dr ($)              Cr ($)   </u>

Jan. 2           Investment in Fain Company           400,000

                    Cash                                                                         400,000

<em><u>                     To record payment for investment in Fain Company           </u></em>

Dec. 31         Investment in Fain Company             35,350

                    Share of profit of Fain Co.                                        35,000

<em><u>                     To record share of profit in Fain Company                           </u></em>

Dec. 31         Cash                                                     10,880

                    Investment in Fain Company                                    10,880

<em><u>                     To record received from investment in Fain Company       </u></em>

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