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Prepare the journal entry to record the sale

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Question: On January 2, 2010, Hull Corp. paid $516,000 for 24% (48,000 sharunt fo the outstanding common stock of Oliver do. Hull used the equity method to account for the investment. At the end Of 2010, the balance in the investment account was $620,000. On January 2, 2011, Hull sold 12,000 shares of Oliver stock for $13 per Share. For 2011, Oliver reported income of $118,000 and paid dividends of $30,000.

Required:

(A.) Prepare the journal entry to record the sale of the 12,000 shares.

(B.) After the sale has been recorded, what is the balance in the investment account?

(C.) What percentage of Oliver Co. stock does Hull own after selling the 12,000 shares?

(D.) Because of the sale of stock, Hull can no longer exercise significant influence over the operations of Oliver. What effect will this have on Hull's accounting for the investment?

(E.) Prepare Hull's journal entries related to the investment for the rest of 2011.

Reference no: EM133416833

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