On June 1, 2017, Wostok Corp. (Wostok) pur chased 1,000,000 common shares of Griffin Ltd. (Griffin) for

Question:

On June 1, 2017, Wostok Corp. (Wostok) pur chased 1,000,000 common shares of Griffin Ltd. (Griffin) for $2,000,000. The investment represents a 40 percent interest in Griffin and gives Wostok significant influence. During fiscal 2018, Wostok's share of Griffin's net income was $440,000. Also, Griffin paid divi dends during the year of $0.50 per share. Both companies have May 31 year-ends.

Required:
a. Prepare Wostok's journal entry to record its investment in Griffin.
b. How much would Wostok report on its May 31, 2018 income statement from this investment?
c. What amount would be reported on Wostok's May 31, 2018 for its investment in Griffin? Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...