QUESTION 21
Alpha Company has purchased 10,000 shares of stock of Beta
Company for $50,000,000. This represents...
80.2K
Verified Solution
Link Copied!
Question
Accounting
QUESTION 21
Alpha Company has purchased 10,000 shares of stock of BetaCompany for $50,000,000. This represents 20% ownership. Whatjournal entry, if any would Alpha make in the followingsituation:
Beta declares and immediately pays a dividend of $1 per share.Assume Alpha uses the equity  method of accounting forits investment? (3 points)
Refer to the same facts as the previous problem. Â
What would be the journal entry be if Alpha learns that thevalue of Beta’s stock has increased by $2 per share, and Alpha usesthe equity method of accounting for this investment? (3 points)
Use the same facts as the prior problems. What journal entry, ifany, would make in this situation?
Alpha learns that Beta had a loss of $1 million. Assume Alphauses the fair value method of accounting for its investment. (3points)
Answer & Explanation
Solved by verified expert
3.9 Ratings (608 Votes)
See Answer
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: Zin AI - Your personal assistant for all your inquiries!
