Please answer the exercise step by step and clear. Thank you. Sony Corporation paid $350,000...
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Accounting
Please answer the exercise step by step and clear. Thank you.
Sony Corporation paid $350,000 cash for 42% of the voting common stock of Micro Inc. on January 1, 2021. Book value and fair value information for Inc. in this date is as follows:
Instructions:
1. Prepare the journal entries for purchased investment.
2. Prepare the analysis of the cost versus the book value of the net assets of the investment bought in Micro Inc by Sony Corporation.
3. Prepare the schedule with the differences between the book value and the fair value of the identifiable net assets of Micro Inc.
4. At the end of the year, Micro Inc was:
a. Net Income for $300,000
b. Paid dividends at Dec 31, 2021 for $35,000
Prepare the journal entries related with net income and dividends received Sony Corporation for Micro Inc.
