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    This document contains accounting journal entries for investments in Sheon Co. using the cost and equity methods for the years 2016 and 2017. In 2016, $200,000 was invested in Sheon using the cost method, with $2,500 in dividend income recorded in March and September. In 2017, $1,000,000 was invested using the equity method, with dividend income and a share of $120,000 net income recorded.

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    This document contains accounting journal entries for investments in Sheon Co. using the cost and equity methods for the years 2016 and 2017. In 2016, $200,000 was invested in Sheon using the cost method, with $2,500 in dividend income recorded in March and September. In 2017, $1,000,000 was invested using the equity method, with dividend income and a share of $120,000 net income recorded.

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    © All Rights Reserved
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    12 views3 pages

    Hbjhjhjhujuhj

    Uploaded by

    njkjh
    This document contains accounting journal entries for investments in Sheon Co. using the cost and equity methods for the years 2016 and 2017. In 2016, $200,000 was invested in Sheon using the cost method, with $2,500 in dividend income recorded in March and September. In 2017, $1,000,000 was invested using the equity method, with dividend income and a share of $120,000 net income recorded.

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    © All Rights Reserved
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    Question:

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    Jan- 1- 2016 cash paid


    200,000

    Percentage of interest 10%

    Jan- 1- 2017 cash paid    1,000,000

    Percentage of interest 7%

    Dec- 31- 2015 Common stock    1,500,000

    Retained earnings
    500,000

    March- 1- 2016 Dividends


    25,000

    Sep- 1- 2016 Dividends


    25,000
    March- 1- 2017 Dividends
    25,000

    Sep- 1- 2017 Dividends


    25,000

    YEAR - 2016 Net income


    100,000

    YEAR - 2017 Net income


    150,000

    COST METHOD

    2016

    01- Jan Investment in Sheon


    200,000

         Cash
    200,000

    01- Mar Cash


    2,500

         Dividends Income


    2,500

    01- Sep cash


    2,500

         Dividends Income


    2,500

    31- Dec NO ENTRY

    (cost method doesn't recognize net


    income)
    EQUITY METHOD

    2017

    01- Jan Investment in Sheon    1,000,000

         Cash    1,000,000

    Dividends Income
    5,000

         investment in Sheon


    5,000

    01- Mar Cash


    20,000

         investment in Sheon


    20,000

    01- Sep Cash


    20,000

         investment in Sheon


    20,000

    31- Dec Investment in Sheon


    120,000

          income from Sheon


    120,000

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