On January 1, 2018, Wallace, Inc. decides to invest in 7,200 shares of Dressage stock when the stock is selling for $ 20 per share. On June 1, 2018, Dressage paid a $ 1.00 per share cash dividend to stockholders. On December 31, 2018, Dressage reports net income of $ 80,000 for 2018. Assume Dressage has 18,000 shares of voting stock outstanding during 2018 and Wallace has significant influence over Dressage. 1. Identify what type of investment the Dressage stock is for Wallace.
2. Journalize the transactions related to Wallace's investment in the Dressage stock during 2018.
3. In what category and at what value would Wallace's report the investment on the December 31, 2018, balance sheet?
REQUIREMENT 1:
Wallace's investment would be investment.
a. a controlling interest
b. a held-to-maturity
c. a no significant influence
d. a significant influence
e. an available-for-sale
REQUIREMENT 2:
1) January 1:Wallace Inc. decides to invest in 7,200 shares of Dressage stock when the stock is selling for $20 per share.
Debit Credit
2) June 1: Dressage paid a $1.00 per share cash dividend to stockholders
Debit Credit
3) December 31: Dressage reports net income of $80,000 for 2018.
Debit Credit
REQUIREMENT 3:
In what category and at what value would Wallace's report the investment on the December 31, 2018 balance sheet?
Wallace would report a ( long term assets, long term liability, short term asset, short term liability) of $ on the December 31 2018 balance sheet