Urgent help on accounting homework please? Market Research Syndicate acquired 10

Question

Urgent help on accounting homework please?

Market Research Syndicate acquired 100 shares of Catskill Tools for $450,000 on January 1, 2X13. During 2X13, Catskill Tools declared and paid a total of $8,000 in dividends and reported net income of $50,000. Market Research Syndicate plans on holding the investment for a long time.

Assuming Market Research Syndicate owns 40% of Catskill Tools, prepare journal entries for Market Research Syndicate for the following events:

1. acquisition

2. recognition of net income

3. dividends

Explanation / Answer

Date Particular Dr. Cr. Jan'1 Share purchased A/c dr. $450,000                 to Bank A/c $450,000 2013 Bank A/c Dr. $3,200                                to dividend A/c $3,200 (Being amount received against dividend) Income Receivable a/c dr. 20000                              to Income 20000 (Being Income Recognised)

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