On January 1, 2012, Garr Company purchased 5,000 shares of Cey company stock for
ID: 2456741 • Letter: O
Question
On January 1, 2012, Garr Company purchased 5,000 shares of Cey company stock for $300,000. Garr investment represents 30 percent of the total outstanding shares of Cey. During 2012, Cey paid total dividends of $100,000 and reported net income of $300,000. On December 31, the market price of Cey Company was $280,000.
Instructions
(a) Prepare all necessary entries for 2012. if "no entry" is necessary, indicate so and explain why.
(b) What revenue does Garr report related to this investment on the income statement and what is the amount to be reported as an investment in Cey stock at December 31, 2012 on the balance sheet? (show and label all worl)
Explanation / Answer
On January 1, 2012, Garr Company purchased 5,000 shares of Cey company stock for
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