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    Hatcher Co: JEs for Fair Value and Equity Methods

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    AE17-12 Equity Method vs. Fair Value Method

    Show the journal entries for each date in 2012:

    March 18: Hatcher Cosmetics acquired 10% of the 218,100 shares of common stock of Ramirez Fashion at a total cost of $15 per share.
    June 30: Ramirez declared and paid a $81,500 cash dividend.
    Dec 31: Ramirez reported net income of $126,100 for the year.
    At year end, the market price of Ramirez Fashion was $17 per share and these should be classified as available-for-sale.

    Jan 1: Holmes, Inc. bought 25% of Nadal Corp's 33,400 outstanding shares of common stock at a total cost of $12 per share (significant influence).
    June 15: Nadal declared and paid a dividend of $37,700.
    Dec 31: Nadal reported a net income of $91,200.

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    Solution Summary

    Your tutorial gives instructional notes and the journal entries needed. Click in cells to see computations.