Asked by Matias Morales on May 22, 2024
Verified
On January 1 Oetry Corporation purchased a 35% equity in Selig Company for $190000. At December 31 Selig declared and paid a $50000 cash dividend and reported net income of $80000.
Instructions
Prepare the necessary journal entries for Oetry Corporation.
Equity Interest
Ownership interest in a company, typically represented by stocks, indicating the holder's stake in the company's assets and earnings.
Cash Dividend
A payment made by a company out of its profits to its shareholders, usually in cash.
Net Income
The net income of a company once all costs and taxes are deducted from its total revenue.
- Exhibit understanding of the equity method in accounting practices for investments and its utilization in scenarios where substantial influence is applied on the investee.
- Measure and chronicle in accounting journals the financial gains, financial losses, dividends acquired, and income derived from interest on investments.
Verified Answer
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Learning Objectives
- Exhibit understanding of the equity method in accounting practices for investments and its utilization in scenarios where substantial influence is applied on the investee.
- Measure and chronicle in accounting journals the financial gains, financial losses, dividends acquired, and income derived from interest on investments.
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