Writing Wellman Company acquired 30% of the outstanding commonstock of Grinwold Inc. on January...

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Writing Wellman Company acquired 30% of the outstanding commonstock of Grinwold Inc. on January 1, 2022, by paying $1,800,000 for60,000 shares. Grinwold declared and paid a $0.50 per share cashdividend on June 30 and again on December 31, 2022. Grinwoldreported a net income of $800,000 for the year. a. Total dividendrevenue for 2022 $60,000 b. Revenue from stock investments $240,000Instructions a. Prepare the journal entries for Wellman Company for2022, assuming Wellman cannot exercise significant influence overGrinwold. (Use the cost method.) b. Prepare the journal entries forWellman Company for 2022, assuming Wellman can exercise significantinfluence over Grinwold. (Use the equity method.) c. The board ofdirectors of Wellman Company is confused about the differencesbetween the cost and equity methods. Prepare a memorandum for theboard that explains each method and shows in tabular form theaccount balances under each method at December 31, 2022.

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a Prepare the journal entries for Wellman Company for 2022assuming Wellman cannot exercise significant influence overGrinwold Use the See Answer

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In: AccountingWriting Wellman Company acquired 30% of the outstanding commonstock of Grinwold Inc. on January 1,...Writing Wellman Company acquired 30% of the outstanding commonstock of Grinwold Inc. on January 1, 2022, by paying $1,800,000 for60,000 shares. Grinwold declared and paid a $0.50 per share cashdividend on June 30 and again on December 31, 2022. Grinwoldreported a net income of $800,000 for the year. a. Total dividendrevenue for 2022 $60,000 b. Revenue from stock investments $240,000Instructions a. Prepare the journal entries for Wellman Company for2022, assuming Wellman cannot exercise significant influence overGrinwold. (Use the cost method.) b. Prepare the journal entries forWellman Company for 2022, assuming Wellman can exercise significantinfluence over Grinwold. (Use the equity method.) c. The board ofdirectors of Wellman Company is confused about the differencesbetween the cost and equity methods. Prepare a memorandum for theboard that explains each method and shows in tabular form theaccount balances under each method at December 31, 2022.