Listed below are a few events and transactions of Kodax Company. 2017 2018 Prepa

Question

Listed below are a few events and transactions of Kodax Company.

2017

2018

Prepare journal entries to record the above transactions and events of Kodax Company. (Do not round intermediate calculations and round your final answers to the nearest dollar amount.)
  

1-Purchased 27,000 shares of Grecco Co. common stock for $427,000 cash plus a broker’s fee of $4,900 cash. Grecco has 100,000 shares of common stock outstanding, and its policies will be significantly influenced by Kodax.

2-Grecco declared and paid a cash dividend of $3.40 per share.

3-Grecco announced that net income for the year is $515,400.

4-Grecco declared and paid a cash dividend of $4.00 per share.

5-Grecco announced that net income for the year is $747,900.

6-Kodax sold 14,000 shares of Grecco for $415,000 cash.

Jan. 2 Purchased 27,000 shares of Grecco Co. common stock for $427,000 cash plus a broker’s fee of $4,900 cash. Grecco has 100,000 shares of common stock outstanding, and its policies will be significantly influenced by Kodax. Sept. 1 Grecco declared and paid a cash dividend of $3.40 per share. Dec. 31 Grecco announced that net income for the year is $515,400.

Explanation / Answer

2017 Jan-02 Equity investment (427000+4900) 431900 Cash 431900 Sep-01 Cash (27000*3.4) 91800 Equity investment 91800 Dec-31 Equity investment (515400*27000/427000) 32590 Investment income 32590 2018 Jun-01 Cash (27000*4) 108000 Equity investment 108000 Dec-31 Equity investment (415000*27000/427000) 26241 Investment income 26241 Dec-31 Cash 415000 Gain on sale of equity investment 264147 Equity invesment (290931*14000/27000) 150853 Total equity investment: Initial investment 431900 Cash dividend - 2017 -91800 NI share of 2017 32590 Cash dividend - 2018 -108000 Ni share of 2018 26241 Equity investment before sale 290931

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