Solution-Prepare the appropriate journal entries from the

Prepare the appropriate journal entries from the purchase

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Reference no: EM131782028

Question - As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 400,000 shares for $480,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC's net assets were equal. During the year, AMC earned net income of $250,000 and distributed cash dividends of 25 cents per share. At year-end, the fair value of the shares is $505,000.

Required:

(1) Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.

(2) Assume significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.

Reference no: EM131782028

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Prepare the appropriate journal entries from the purchase

Reference no: EM131782028

Reference no: EM131782028

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