On January 1 , 2 0 2 2 , Winnie Corporation purchased 2 0 ( 5 , 0 0 0 shares ) of the outstanding stock of Naomi Corporation for $ 1 0 0 , 0 0 0 At the end of 2 0 2 2 , Naomi Corporation s stock had a fair market value of $ 2 4 per share and at the end of 2 0 2 3 , the stock had a fair market value of $ 2 2 per share During 2 0 2 3 , Naomi Corporation paid dividends of $ 3 0 0 per share and earned $ 6 0 , 0 0 0 in net income a Prepare the journal entries that Winnie would make during 2 0 2 3 assuming that they do NOT have significant influence over Naomi as a result of their stock ownership ( i e fair value method ) b Prepare the journal entries that Winnie would make during 2 0 2 3 assuming that they do have significant influence over Naomi as a result of their stock ownership ( i e equity method ) Show formulas in excel format

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Question: On January 1 , 2 0 2 2 , Winnie Corporation purchased 2 0 % ( 5 , 0 0 0 shares ) of the

On January

1, 2022,

Winnie Corporation purchased

20 % (5, 000

)

of the outstanding stock

of Naomi Corporation for $

100, 000 .

At the end of

2022,

Naomi Corporation

s stock had a fair

market value of $

24

per share and at the end of

2023,

the stock had a fair market value of $

22

per

share.

During

2023,

Naomi Corporation paid dividends of $

3.00

per share and earned $

60, 000

in net

income.

.

Prepare the journal entries that Winnie would make during

2023

assuming that

they do NOT have significant influence over Naomi as a result of their stock

ownership

(

.

.

fair value method

) .

.

Prepare the journal entries that Winnie would make during

2023

assuming that

they do have significant influence over Naomi as a result of their stock ownership

(

.

.

equity method

) .

Show formulas in excel format

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