On July 28th 2019, Berkshire Hathaway bought 750,000 shares of Brooks Running Shoes stock for $40...

On July 28th 2019, Berkshire Hathaway bought 750,000 shares of Brooks Running Shoes stock for $40 per share. Brooks’ Net Income for the year was $1.3 million. Berkshire received dividend payments of $150,000 each on September 30th, and December 31st. At December 31st (year-end) the stock was worth $42 per share.

a. Prepare all appropriate journal entries for this investment for 2019 including any adjusting entries at year-end.

b. Indicate amounts that Precision will show on its 2019 Income Statement, Statement of Comprehensive Income, and Balance Sheet.

i. Income Statement

ii. Statement of Comprehensive Income

iii. Balance Sheet

c. Assume that the investment was sold on January 5, 2020 for $41.50 per share. Prepare the journal entry or entries to record the sale.

Expert Solution

ekkarill92 answered 2 years ago

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