On January 1, 2018, Bowie Company purchased 20,000 shares of the stock of Spears Co, and did obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $200,000, and represents a 30% ownership stake. Spears made $50,000 of net income in 2018, and paid dividends of $20,000. The price of Spears' stock increased from $10 per share at the beginning of the year, to $12 per share at the end of the year.

a. Show the January 1 and December 31 general journal entries for Bowie Company.

b.How much should the Bowie Company report on the balance sheet for the investment in Spears at the end of 2018?

Answer rating: 100% (QA)

a January 1 general journal entry for Bowie Company Debit Investment in Spears Co 200000 Credit Cash ... View the full answer