At a total cost of $5,600,000, Herrera Corporation acquired 280,000 shares of Tran Corp. common stock as
Question:
a. Journalize the entries by Herrera Corporation to record the following information:
1. Tran Corp. reports net income of $600,000 for the current period.
2. A cash dividend of $0.50 per common share is paid by Tran Corp. during the current period.
b. Why is the equity method appropriate for the Tran Corp. investment?
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Related Book For
Accounting
ISBN: 978-1337899451
27th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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