Prepare the journal entries for final company

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Final Company acquired 10% of the outstanding shares of Cho Corporation on January 18, 2018. The purchase price was $12,5000,000 for 50,000 shares. Cho Corporation declared and paid an $80 per share cash dividend on March 29 and on June 26, 2018. Cho reported net income of $7,3000,000 for 2018. The fair value of Cho's shares was $2,700 per share at December 31, 2018.

Question 1. Prepare the journal entries for Final Company. These investments should be classified as trading.

Question 2. Prepare the journal entries for Final Company, assuming 30% of the outstanding shares of Cho Corporation were purchased on January 18.

Question 3. At what amount is the investment reported on the statement of financial position under each of these methods at December 31, 2018? What is the total net income reported in 2018 under each of these methods?

Reference no: EM132576107

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