On April 1, 2020, Campbell Corp. acquired 2,500 shares of Lipton Inc. for $50,000. This investment represents
Question:
On April 1, 2020, Campbell Corp. acquired 2,500 shares of Lipton Inc. for $50,000. This investment represents a 18% interest in Lipton Inc. and Campbell Corp. has significant influence. On October 31, 2020, Lipton Inc. paid a $42,000 dividend to its shareholders. At March 31, 2021 Lipton Inc.'s shares were valued at $15 per share and Lipton Inc. reported a net loss of $150,000 for the year. On May 15, 2021, Campbell Corp. sold the shares for $75,000. Both Campbell Corp. and Lipton Inc. have March 31, 2021 year-ends.
Required:
Prepare dated journal entries for the investment on the acquiring company's books from acquisition to disposal.
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy