On January 1 Doug las Stores Incorporated acquired 30 of

Kirk #3199
On January 1, Doug-las Stores, Incorporated acquired 30% of Kirk Shoe Company. Douglas is
acquiring the affiliate to secure a reliable source of supply. Douglas acquired 195,000 shares of
the 650,000 shares of the investee company at a cost of $ 2,540,000. At the time of acquisition,
the book value of Kirk’s net assets equaled its market value. Kirk reported $ 8,136,700 net
income and declared and paid dividends of $ 2,275,000 at the end of the year of acquisition.
Requireda. Prepare the journal entry required to record the acquisition of the investment in Kirk
Shoe. b. Prepare the journal entry required to record Douglas’s share of the investee’s net
income. c. Prepare the journal entry required to record the receipt of the cash dividends. d.
What is the carrying value of Douglas’s investment in Kirk Shoe at the end of the year?View
Solution:
On January 1 Doug las Stores Incorporated acquired 30 of Kirk

ANSWER
http://paperinstant.com/downloads/on-january-1-doug-las-stores-incorporated-acquired-30-of-
kirk/

1/1
Powered by TCPDF (www.tcpdf.org)