Jan 1, SSS buys 60,000 shares of Inc at $20/share as a long-term investment in the stock portfolio. The purchase represents 25% of all outstanding Inc stock and SSS has representation on Inc’s board of directors. Journalize the purchase.
Stock Investments $12000000
On June 31, 2008 Inc reports net income of $20,000 for its fiscal year ended June 31. Make the journal entry for SSS.
Fair Value Adjustment-Stock $300000
Unrealized Gain or Loss-Income $300000
On October 1, Inc pays a $1/share cash dividend. Journalize SSS’s receipt of this dividend.
Dividend Revenue $60000
On Dec 31, Inc shares are trading $18/share. What fair value adjustment, if any, needs to be made?
How will this stock be represented on the SSS balance sheet?
Get Answers For Free
Most questions answered within 1 hours.