On January 1, 2017, XYZ Company purchased 80,000 shares of the stock of Rayco, and did obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $475,000, and represents a 30% ownership stake. Rayco made $2,748,572 of net income in 2017, and paid dividends of $155,000. The price of Rayco’s stock increased from $10 per share at the beginning of the year, to $40 per share at the end of the year. Requirements: Prepare the January 1 and December 31 general journal entries for XYZ Company. How much should the XYZ Company report on the balance sheet for the investment in Rayco at the end of 2017?

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989 viewsJuly 18, 2017

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Darshita 6.14K July 18, 2017 0 Comments

On January 1, 2017, XYZ Company purchased 80,000 shares of the stock of Rayco, and did obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $475,000, and represents a 30% ownership stake. Rayco made $2,748,572 of net income in 2017, and paid dividends of $155,000. The price of Rayco’s stock increased from $10 per share at the beginning of the year, to $40 per share at the end of the year.

Requirements:

Prepare the January 1 and December 31 general journal entries for XYZ Company.

How much should the XYZ Company report on the balance sheet for the investment in Rayco at the end of 2017?

1 Answer

score 0 · Answer 1 · 2017-07-18T09:02:24+00:00

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