Simmons Corporation owns stock of Armstrong, Inc. Prior to 2012, the investment

Question

Simmons Corporation owns stock of Armstrong, Inc. Prior to 2012, the investment was accounted for using the equity method. In early 2012, Simmons sold part of its investment in Armstrong, and began using the fair value method. In 2012, Armstrong earned net income of $85,200 and paid dividends of $94,300. Prepare Simmons's entries related to Armstrong's net income and dividends, assuming Simmons now owns 11% of Armstrong's stock.  (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)

Description Debit Credit Realized LossTrading SecuritiesDividend RevenueUnrealized Holding Gain or Loss-EquityEquity Investments (AFS)CashRealized GainInvestment in Armstrong Stock $       Dividend RevenueEquity Investments (AFS)CashUnrealized Holding Gain or Loss-EquityInvestment in Armstrong StockRealized GainTrading SecuritiesRealized Loss $       CashUnrealized Holding Gain or Loss-EquityDividend RevenueEquity Investments (AFS)Realized LossInvestment in Armstrong StockTrading SecuritiesRealized Gain $ Simmons Corporation owns stock of Armstrong, Inc. Prior to 2012, the investment was accounted for using the equity method. In early 2012, Simmons sold part of its investment in Armstrong, and began using the fair value method. In 2012, Armstrong earned net income of $85,200 and paid dividends of $94,300. Prepare Simmons's entries related to Armstrong's net income and dividends, assuming Simmons now owns 11% of Armstrong's stock. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)

Explanation / Answer

Simmons Corporation owns stock of Armstrong, Inc. Prior to 2012, the investment

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