Answer:
(a)
Dr Investment in Gordon Corp. 230,400
Cr Cash 230,400
( to record investment in Gordon Corp.; calculated as 10 x 23,000 + 400)
(b)
Dr Investment in Gordon Corp. 18,400
Cr Share of Gordon Corp earning 18,400
( to record share of profit in Gordon Corp, calculated as % of Gordon Corp share owned x Gordon Corp's earnings = 23,000/100,000 x 80,000)
(c)
Dr Cash 45,000
Cr Investment in Gordon Corp. 45,000
( Record dividend receipt from Gordon Corp)
Explanation:
Further explanation, as Morgan Co. acquires 23% of Gordon Corp. ( 23,000/100,000); equity method should be applied.
