Oregon Company, a paper products manufacturer, wishes to enter the Canadian market. The company purchased 30...

 

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Oregon Company, a paper products manufacturer, wishes to enter the Canadian market. The company purchased 30 percent of the outstanding stock of Canadian Paper Inc. on January 1, Year One, for $6,000,000. The CEO of Oregon will sit on the board of directors of Canadian, and other evidence of significant influence does exist. a. Canadian reported net income of $760,000 for the year. Record the journal entry (if any) to be prepared by Oregon. b. Canadian paid a cash dividend of $80,000. Record the journal entry for Oregon. c. What amount would Oregon report on its balance sheet as its investment in Canadian as of the end of Year One? d. Is the balance reported in the investment in Canadian account considered the fair value of the investment? Oregon Company, a paper products manufacturer, wishes to enter the Canadian market. The company purchased 30 percent of the outstanding stock of Canadian Paper Inc. on January 1, Year One, for $6,000,000. The CEO of Oregon will sit on the board of directors of Canadian, and other evidence of significant influence does exist. a. Canadian reported net income of $760,000 for the year. Record the journal entry (if any) to be prepared by Oregon. b. Canadian paid a cash dividend of $80,000. Record the journal entry for Oregon. c. What amount would Oregon report on its balance sheet as its investment in Canadian as of the end of Year One? d. Is the balance reported in the investment in Canadian account considered the fair value of the investment?

Answer rating: 100% (QA)

a Oregon will need to record its share of Canadians net income as an increase to its investment in C... View the full answer