Selected transactions for Adler Co follow On January 1 2009
Selected transactions for Adler Co. follow.
• On January 1, 2009, Adler Co. invested $300,000 of Walker, Inc. common stock
• On November 15, 2009, Adler Co. received a $5,000 dividend from Walker, Inc.
• Walker, Inc. earned $100,000 of net income for 2009.
• On January 1, 2009, Adler Co. invested in the bonds of McFarland Enterprises by purchasing five newly-issued, $1,000, 10 percent, 10-year bonds for $4,900.
• On June 30, 2009, Mc Far land Enterprises paid semiannual interest to bondholders.
Required:
(a) Record the journal entries for these transactions related to Walker, Inc., assuming that:
(1) Adler Co. owns 10 percent of Walker, Inc.
(2) Adler Co. owns 40 percent of Walker, Inc.
(3) Adler Co. owns 80 percent of Walker, Inc.
(b) Describe Adler Co.’s year-end procedures related to Walker, Inc. under each assumption from part (a).
(c) Record the entries for Adler Co.’s investment in McFarland Enterprises.
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