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Associated Strategies obtained significant influence over Cece Corporation by buying 30% of Cece’s 50,000 outstanding shares...

Associated Strategies obtained significant influence over Cece Corporation by buying 30% of Cece’s 50,000 outstanding shares of common stock at a total cost of $9 per share on January 1, 2020. On June 15, Cece Corporation declared and paid cash dividends of $62,000 to all stockholders. On December 31, Cece Corp. reported a net income of $95,000 for the year.

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Answer #1
Journal Entries
Date Account Titles Debit $ Credit $
January 1.2020 Investment in Cece Corporation 450,000
Cash ( 50,000 x 4 ) 450,000
June 15.2020 Cash ( 62,000 x 30% )     18,600
Investment in Cece Corporation     18,600
December 31.2020 Investment in Cece Corporation     28,500
Investment Revenue     28,500
(95,000 x 30% )
Balance Sheet
As at December 31.2020 Amount $
Investment in Cece Corporation 459,900
(450,000 - 18,600 + 28,500 )
Income Statement
Investment Revenue       28,500
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