On July 12, 2014, Rossow Corporation purchased 2,500 shares of Reimer Company for $45,000. The...
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Accounting
On July 12, 2014, Rossow Corporation purchased 2,500 shares of Reimer Company for $45,000. The following information applies to the fair value of Reimer Company:
Per Share
12/31/2014
$
24
12/31/2015
20
12/31/2016
15
Reimer Company declares and pays cash dividends of $4 per share on May 1 of each year.
1.
Record the purchase of 2,500 shares (23%) of Reimer Company for $45,000. The company will record the investment under the equity method of accounting.
2.
Record the entry to recognize earnings from Rossows investment in Reimer. Reimer reported net income of $27,000 in 2014.
3.
Record the receipt of cash dividends on May 1, 2015 of $4 per share.
4.
Record the entry to recognize earnings from Rossows investment in Reimer. Reimer reported net income of $27,000 in 2015.
5.
Record the receipt of cash dividends on May 1, 2016 of $4 per share.
6.
Record the entry to recognize earnings from Rossows investment in Reimer. Reimer reported net income of $27,000 in 2016.
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