As a long-term investment at the beginning of the 2018 fiscal year, Florists International purchased 30% of Nursery Supplies Inc.’s 8 million shares for $56 million. The fair value and book value of the shares were the same atthat time. During the year, Nursery Supplies earned net income of $40 million and distributed cash dividends of$1.25 per share. At the end of the year, the fair value of the shares is $52 million.Required:Prepare the appropriate journal entries from the purchase through the end of the year.

As a long-term investment at the beginning of the 2018 fiscal year, Florists International purchased 30% of Nursery Supplies Inc.’s 8 million shares for $56 million. The fair value and book value of the shares were the same atthat time. During the year, Nursery Supplies earned net income of $40 million and distributed cash dividends of$1.25 per share. At the end of the year, the fair value of the shares is $52 million.Required:Prepare the appropriate journal entries from the purchase through the end of the year.

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 28E

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