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question exercise 17 16 wildhorse inc acquired 20 of the outstanding common stock of 4285250

Question

Exercise 17-16

Wildhorse Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2017. The purchase price was $1,205,200 for 52,400 shares. Kulikowski Inc. declared and paid an $0.90 per share cash dividend on June 30 and on December 31, 2018. Kulikowski reported net income of $687,000 for 2018. The fair value of Kulikowski’s stock was $26 per share at December 31, 2018. Assume that the security is a trading security.

Date

Account Titles and Explanation

Debit

Credit

(To record dividend.)

(To record fair value.)

Show List of Accounts

Date

Account Titles and Explanation

Debit

Credit

(To record dividend.)

(To record revenue.)

Show List of Accounts

Fair Value Method

Equity Method

 

 

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