As a long-term investment at the beginning of the 2018 fiscal year, Florists Int

Question

As a long-term investment at the beginning of the 2018 fiscal year, Florists International purchased 25% of Nursery Supplies Inc.'s 10 million shares for $65 million. The fair value and book value of the shares were the same at that time. During the year, Nursery Supplies earned net income of $24 million and distributed cash dividends of $.80 per share. At the end of the year, the fair value of the shares is $61 million.
Required:
Prepare the appropriate journal entries from the purchase through the end of the year

1.Investment in Nursery Supplies Shares i put 65M (but wrong) Cash 2.Investment Nursery Supplies Shares i put 6M (25% of 24M) (wrong) investment revenue 3. Cash I got this one wrong as well Investment in Nursery Supplies Shares

Explanation / Answer

Prepare the appropriate journal entries from the purchase through the end of the year

Date accounts & explanation debit credit Investment in Nursery Supplies Shares 65000000 Cash 65000000 (To reccord purchase) Investment in Nursery Supplies Shares (24*25%) 6000000 Investment revenue 6000000 (To record net income) Cash 800000 Investment in Nursery Supplies Shares 800000 (To record dividend)

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