Spritz Company owns 15% of the stock of Turner Corporation. The investment was purchased for $200,000....

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Spritz Company owns 15% of the stock of Turner Corporation. Theinvestment was purchased for $200,000. At the beginning of 2020, ithad a fair value of $230,000. At the end of 2020, its fair value is$250,000. Turner reported net income of $100,000 for 2020, anddeclared and paid cash dividends of $60,000. Spritz sells productsto Turner at a markup of 20% on cost. Turner’s ending inventory for2020 included a balance of $10,800 for products purchased fromSpritz.
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Prepare the journal entries Spritz makes in 2020 to record theabove facts, assuming that Spritz treats its investment as havingsignificant influence and uses the equity method.

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The following journal entries to be made in the books of Spritz in the year 2020 1 Share of the associates profit Investment in Turner Corporation Dr 15000 To Share of income of associate Cr 15000 2 See Answer

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Spritz Company owns 15% of the stock of Turner Corporation. Theinvestment was purchased for $200,000. At the beginning of 2020, ithad a fair value of $230,000. At the end of 2020, its fair value is$250,000. Turner reported net income of $100,000 for 2020, anddeclared and paid cash dividends of $60,000. Spritz sells productsto Turner at a markup of 20% on cost. Turner’s ending inventory for2020 included a balance of $10,800 for products purchased fromSpritz.RequiredPrepare the journal entries Spritz makes in 2020 to record theabove facts, assuming that Spritz treats its investment as havingsignificant influence and uses the equity method.