On January 1 Criquet Co. acquired an interest in the Tamlee Co. for $500,000. At December...

On January 1 Criquet Co. acquired an interest in the Tamlee Co. for $500,000. At December 31, Tamlee Co. declared and paid a cash dividend of $50,000 and reported a net income of $160,000.

REQUIRED:

Prepare the journal entries for the Criquet Co. under each of the independent circumstances:

a. Criquet Co. acquires a 10% interest in the Tamlee Co.

b. Criquet Co. acquires a 25% interest in the Tamlee Co.

Expert Solution

a)	Jan 1 - Purchase	Investment in Tamlee Co. Stock	500000
		Cash		500000
		(To record the 10% share of stock in Tamlee Co.)

	Dec 31 - Income	Investment in Tamlee Co. Stock	16000
		Income of Tamlee Co. ( 160000 x 10%)		16000
		(To record the share in income on Tamlee Co.)

	Dec 31- Dividends	Cash ( 50000 x 10% )	5000
		Investment in Tamlee Co. Stock		5000
		(To record the dividend received from Tamlee Co.)


b)	Jan 1 - Purchase	Investment in Tamlee Co. Stock	500000
		Cash		500000
		(To record the 25% share of stock in Tamlee Co.)

	Dec 31 - Income	Investment in Tamlee Co. Stock	40000
		Income of Tamlee Co. ( 160000 x 25%)		40000
		(To record the share in income on Tamlee Co.)

	Dec 31- Dividends	Cash ( 50000 x 25% )	12500
		Investment in Tamlee Co. Stock		12500
		(To record the dividend received from Tamlee Co.)

ekkarill92 answered 1 month ago

2. On January 1 Criquet Co. acquired an interest in the Tamlee Co. for $500,000. At...

2. On January 1 Criquet Co. acquired an interest in the Tamlee Co. for $500,000. At December 31, Tamlee Co. declared and paid a cash dividend of $50,000 and reported a net income of $160,000. REQUIRED: Prepare the journal entries for the Criquet Co. under each of the independent circumstances: a. Criquet Co. acquires a 10% interest in the Tamlee Co. b. Criquet Co. acquires a 25% interest in the Tamlee Co.

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