The investment in securities reported on balance sheet

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JKL Co. acquired 25% of the 500,000 shares of outstanding common stock of XYZ Inc. on December 31, 2014. The purchase price was $3,600,000. XYZ declared and paid $1.20 per share cash dividends on June 18, 2015, and on November 29, 2015. XYZ reported net income of $1,200,000 for 2015. The fair value of XYZ common stock was $27 per share at December 31, 2015. (a) Prepare the journal entries for JKL Co. for 2015, assuming that JKL cannot exercise significant influence over XYZ. The securities should be classified as available-for-sale. (b) Prepare the journal entries for JKL Co. for 2015, assuming that JKL can exercise significant influence over XYZ. (c) At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31, 2015? What is the total net income reported in 2015 under each of these methods?

Reference no: EM131253582

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The investment in securities reported on balance sheet : JKL Co. acquired 25% of the 500,000 shares of outstanding common stock of XYZ Inc. on December 31, 2014. The purchase price was $3,600,000. XYZ declared and paid $1.20 per share cash dividends on June 18, 2015, and on November 29, 2015. At what amoun..

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