Tresh Company purchased 42,000 shares of common stock of Mann Corporation as a long term investment for $1,000,000 During the year, Mann Corporation reported net income of $200,000 and paid dividends of $80,000 Instructions (a) Assuming that the 42,000 shares represent a 15 interest in Mann Corpora...

a Cost Method 1 Stock Investments 1000000 Cash 1000000 To record purchase ...

Tresh Company purchased 42,000 shares of common stock of Mann Corporation as a long-term investment for $1,000,000.

Question:

Tresh Company purchased 42,000 shares of of Mann as a long-term investment for $1,000,000. During the year, Mann reported net income of $200,000 and paid dividends of $80,000.
Instructions
(a) Assuming that the 42,000 shares represent a 15% interest in Mann Prepare the journal entry to record the investment in Mann stock.
2. Prepare any entries that Tresh Company should make in accounting for its investment in Mann stock during the year.
3. What is the balance of the Stock Investments account on Tresh Company's books at the end of the year?
(b) Repeat requirement (a) above except assume that the 42,000 shares represent a 25% interest in Mann Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...