At the beginning of 2013, Zylon Ltd. acquired 15% of the voting shares of Hendri

Question

At the beginning of 2013, Zylon Ltd. acquired 15% of the voting shares of Hendrick Co. a public company for $150,000. Zylon does not have any significant influence over Hendrick.. In 2013, Hendrick earned net income of $70,000 and paid dividends of $40,000. The fair value of the 15% at the end of 2013 was $160,000. In 2014, Hendrick earned net income of $80,000 and paid dividends of $100,000. The fair value of the 15% at the end of 2014 was $157,000. At the end of 2014, what journal entry should Zylon make regarding its investment in Hendrick Co. in net income?

a) DR Investment in Hendrick 12,000

CR Investment income 12,000

b) DR Investment in Hendrick 80,000

CR Investment income 80,000

c) No entry is required

d) DR Investment in Hendrick 15,000

CR Investment income 15,000

Explanation / Answer

c) No entry is required

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.