Please don't use answer posted for this question as I don't think it's correct. ...
80.2K
Verified Solution
Link Copied!
Question
Accounting
Please don't use answer posted for this question as I don't think it's correct.
2. (20 pts) Quahog purchased 10% of Clam on January 1, 2020 for $360,000 in cash and did not have the ability to exercise significant influence. The price was 10% of Clam's book value. During 2020, Clam reported income of $500,000 and paid a dividend of $10,000. On December 31, 2020, the market value of Quahog's investment in Clam was $370,000. Then, on January 1, 2021, Quahog purchased an additional 20% of Clam for $500,000 in cash and was able to have significant influence. Quahog had been using the fair value method, considering the securities to be available for sale. a. Journalize all necessary entries on the books of Quahog using the fair value method in 2020, including the initial purchase. b. Journalize the conversion to the equity method in 2021
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
