Mike Ltd purchased 80% of the outstanding voting shares of Sam Ltd at the beginning...
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Accounting
Mike Ltd purchased 80% of the outstanding voting shares of Sam Ltd at the beginning of 2009 for $387,000. At the time of purchase, Sams total stockholders equity amounted to $475,000. Income and dividend distributions for Sam from 2009 through 2010 are as follows:200920102011Net income(loss)$63,500$52,500-$55,000Dividend distribution$25,000$50,000$35,000Required: Prepare journal entries for Parent from the date of purchase through 2011 to account for its investment in Sam Ltd under each of the following assumptions: Cost Method Equity Method
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