Prepare the journal entries for milani related to investment

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Reference no: EM131914504

Problem

Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2017, for $199,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2018, Milani purchased an additional 30 percent of Seida for $686,000 which resulted in significant influence over Seida. On that date, the fair value of Seida's common stock was $2,080,000 in total. Seida's January 1, 2018 book value equaled $1,930,000, although land was undervalued by $136,000. Any additional excess fair value over Seida's book value was attributable to a trademark with an 8-year remaining life. During 2018, Seida reported income of $286,000 and declared and paid dividends of $100,000. Prepare the 2018 journal entries for Milani related to its investment in Seida.

Reference no: EM131914504

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