Equity Method for Stock Investment On January 4, Year 1, Ferguson Company purchased 62,500 shares...
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Accounting
Equity Method for Stock Investment
On January 4, Year 1, Ferguson Company purchased 62,500 shares of Silva Company directly from one of the founders for a price of $60 per share. Silva has 250,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $181,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $584,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva.
a. Provide the Ferguson Company journal entries for the transactions involving its investment in Silva Company during Year 1.
Year 1, Jan. 4
Investment in Silva Company Stock
fill in the blank 0b644bfef010faf_2
Cash
fill in the blank 0b644bfef010faf_4
Year 1, July 2
Cash
fill in the blank 0b644bfef010faf_6
Investment in Silva Company Stock
fill in the blank 0b644bfef010faf_8
Year 1, Dec. 31
Investment in Silva Company Stock
fill in the blank 0b644bfef010faf_10
Income of Silva Company
fill in the blank 0b644bfef010faf_12
b. Determine the December 31, Year 1, balance of Investment in Silva Company Stock. $fill in the blank cca5b4fc7fbdfb1_1
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