Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on january 1, 2019, mojito corporation purchased 2

On January 1, 2019, Mojito Corporation purchased 26% (30,000 shares) of the outstanding stock of...

90.2K

Verified Solution

Question

Accounting

image
On January 1, 2019, Mojito Corporation purchased 26% (30,000 shares) of the outstanding stock of Dulcinea Corporation for $175,000. During 2019, Dulcinea Corporation paid total dividends of $85,000 and earned $135,000 in net income. At the end of 2019, Dulcinea Corporation's stock had a fair market value of $6 per share. Required: a. Prepare the journal entries that Mojito would make during 2019 assuming that they do NOT have significant influence over Dulcinea as a result of their stock ownership (i.e. fair value method). They are using the fair value method. b. Prepare the journal entries that Mojito would make during 2019 assuming that they do have significant influence over Dulcinea as a result of their stock ownership (i.e. equity method)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students