Question

Acair Cookie Corporation purchased 30% of the 326.000 outstanding shares of SP's Fine Foods, Inc. on January 1 of the current year. Adair Cookie aocuired the shares at a price of $1.10 per share. SP's Fine Foods. Inc. reported net income of $68.000 and declared and paid cash dividends of $28.100 during the current year. Al the time of acquisition, the book value of SP's Fine Foods' net assets equalec ils market value. Requirement Prepare all journal entics necessary to account for this investment in SP's on Adair Cookie's books under the equity method Prepare all journal is necessary to account for this investment in SP's on Adair Cookie's hooks under the exquily me hex (Rexrd cctils first, then credils. Exclude explanations from any journal enties First, record Adair Cookie Corporation's acquisition of a 30% share of SP's Fine Foods, Inc on January 1 of the current year. Account January 1, Current Year Choose from any list or enter any number in the input fields and then click Check Answer ? 2 parts remaining Clear All Check Answer

Answer 1

Journal Entries - Adair Cookie Corporation
Date	Particulars	Debit	Credit
1-Jan	Investment in SP's Fine Food Inc. Dr	$400,980.00
	To Cash		$400,980.00
	(To record investment in SP food)
31-Dec	Investment in SP's Fine Food Inc. Dr	$20,400.00
	To Investment Income		$20,400.00
	(To record share of income in SP)
31-Dec	Cash Dr	$7,830.00
	To Investment in SP's Fine Food Inc.		$7,830.00
	(To record dividend received)