Required:

Complete the following journal entries.

a. Purchased additional investments in affiliated companies for cash.

b. Received cash dividends on the investments.

c. At year-end, the investments in affiliates account had a fair value of $63,300; the affiliate also reported $5,860 in net income for the year.

d. What would be reported on the balance sheet related to the investments in affiliates on December 31? (Hint: under Assets)

e. What would be reported on the income statement for the year? (Hint: under Other Items)

Transcribed Image Text:

Below are selected T-accounts for William Company. Investments in Affiliates 83,620 12,850 ? 1/1 Purchase Share of affiliate net income 12/31 89,420 10,107 Equity in Affiliate Earnings 0 ? 3,057 Share of affiliate dividends 1/1 Share of affiliate net income 12/31 Below are selected T-accounts for William Company. Investments in Affiliates 83,620 12,850 ? 1/1 Purchase Share of affiliate net income 12/31 89,420 10,107 Equity in Affiliate Earnings 0 ? 3,057 Share of affiliate dividends 1/1 Share of affiliate net income 12/31

Answer rating: 100% (QA)

Solution account title debit credit a Investment in affiliates 12850 cash 1285... View the full answer