Dale Corporation acquired a 35 interest in Roger Inc for

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Dale Corporation acquired a 35% interest in Roger Inc. for $ 300,000 on January 1 of the
current year. Specifically, Dale acquired 68,250 of the 195,000 voting common shares
outstanding. Roger reported net income of $ 120,000 at the end of the current year and paid
cash dividends of $ 36,000 during the current year. At the time of acquisition, the book value of
Roger’s net assets equaled its market value. Roger’s shares were selling for $ 6 per share at
the end of the current year. Required a. Prepare all journal entries required to record the
transactions indicated assuming that Dale uses the equity method. b. Determine the carrying
value of the investment at the end of the current year assuming that Dale uses the equity
method. c. Prepare the journal entries required to account for Dale’s investment in Roger
assuming that the investment is classified as available- for- sale.View Solution:
Dale Corporation acquired a 35 interest in Roger Inc for

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