On january 1 2014 flip company purchased 10000 shares of, Ask an Expert

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On January 1, 2014, Flip Company purchased 10,000 shares of the stock of Flimsy, and did obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $90,000, and represents a 30% ownership stake. Flimsy made $25,000 of net income in 2014, and paid dividends of $10,000. The price of Flimsy's stock increased from $10 per share at the beginning of the year, to $12 per share at the end of the year.

Requirements:

a. Prepare the January 1 & December 31 general journal entries for Flip Company.

b. How much should the Flip Company report on the balance sheet for the investment in Flimsy as the end of 2014

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91588751

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