On January 1, 2017, Sheridan Corporation purchased 30% of the common shares of S

Question

On January 1, 2017, Sheridan Corporation purchased 30% of the common shares of Skysong Company for S 196 ODO During the year, Skysong earned net income of $73,000 and paid dividends of $18,250. Prepare the entries for Sheridan to record the purchase and any additional entries related to this investment in Skysong Company in 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Account Titles and Explanation Debit Credit (To record purchase of stock.) (To record receipt of dividends.) (To record revenue.)

Explanation / Answer

As per policy only first question will be answered

Equity in subsidiary income (73000*30%)

(to record revenue)

21900

Accounts title and explanation debit credit Investment in Stock 196000 Cash 196000 (to record the purchase) Cash 5475 Investment in Stock (18250*30%) 5475 (to record receipt of dividends) Investment in Stock 21900

Equity in subsidiary income (73000*30%)

(to record revenue)

21900

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