On January 1, Crane Corporation purchased a 25% equity in Helbert Corporation fo

Question

On January 1, Crane Corporation purchased a 25% equity in Helbert Corporation for $152,500. At December 31, Helbert declared and paid a $45,100 cash dividend and reported net income of $241,000. Your answer is correct. Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do n indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem Date Account Titles and Explanation Debit Credit 152500 an. 1Stock Investments as 5250 Cash ec. 31 1 1275 bit1279 30250 tock Investment (To record dividends received) ec. 31 1Stock Investment Revenue from Stock Investmen 6025 (To record equity in Helbert Corporation's net income) Attempts: 2 of 3 used Determine the amount to be reported as an investment in Helbert stock at December 31. Investment in Helbert, December 31 Attempts: O of 3 used

Explanation / Answer

(b). Investment in Helbert, December 31 = $201475

Explanation;

Investment in Helbert, December 31, will be calculated as follow;

Purchased price of investment

$152500

- Dividends ($45100 * 0.25)

($11275)

+ Share in net income ($241000 * 0.25)

$60250

Value of investment on December 31

$201475

Purchased price of investment

$152500

- Dividends ($45100 * 0.25)

($11275)

+ Share in net income ($241000 * 0.25)

$60250

Value of investment on December 31

$201475

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