Novak Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31,...

Novak Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2017. The purchase price was $1,031,800 for 46,900 shares. Kulikowski Inc. declared and paid an $0.80 per share cash dividend on June 30 and on December 31, 2018. Kulikowski reported net income of $714,000 for 2018. The fair value of Kulikowski’s stock was $25 per share at December 31, 2018. Assume that the security is a trading security.

Prepare the journal entries for Novak Inc. for 2017 and 2018, assuming that Novak cannot exercise significant influence over Kulikowski. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Prepare the journal entries for Novak Inc. for 2017 and 2018, assuming that Novak can exercise significant influence over Kulikowski. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Expert Solution

ekkarill92 answered 1 year ago

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