On July 12, 2018, Rossow Corporation purchased 1,000 shares of Reimer Company for $30,000. The following information applies to the fair value of Reimer Company:

Reimer Company declares and pays cash dividends of $2 per share on May 1 of each year.

Required:

1. Prepare journal entries to record the facts in the case, assuming Rossow owns less than 10 percent of Reimer’s stock.
2. Prepare journal entries to record the facts in the case, assuming Rossow owns 30 percent of Reimer’s stock. Reimer reported $50,000 of net income each year.

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Per Share 12/31/2018 $33 12/31/2019 28 12/31/2020 20