On January 10 2015 Delta Corporation acquired 12 000

shares of #6485
On January 10, 2015, Delta Corporation acquired 12,000 shares of the outstanding common
stock of Kennedy Company for $600,000. At the time of purchase, Kennedy Company had
outstanding 48,000 shares with a book value of $2.4 million. On December 31, 2015, the
following events took place:(a) Kennedy reported net income of $160,000 for the calendar year
2015.(b) Delta received from Kennedy a dividend of $0.55 per share of common stock.(c) The
fair value of Kennedy Company stock had temporarily declined to $44 per share.Give the
entries that would be required to reflect the purchase and subsequent events on the books of
Delta Corporation, assuming that (1) the security is classified as available for sale and (2) the
equity method is appropriate.View Solution:
On January 10 2015 Delta Corporation acquired 12 000 shares of

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