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Question: harper inc acquires 40 percent of the outstanding voting stock...

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Harper, Inc, acquires 40 percent of the outstanding voting stock of Kinma Company on January 1, 2017, for $228,600 in cash. The book value of Kinmans net assets on that date was $445,000, although one of the companys buildings, with a $71,000 carrying amount, was actually worth $112,000. This building had a 10-year remaining life. Kinman owned a roya agreement with a 20-year remaining life that was undervalued by $85,500. Kinman sold inventory with an original cost of $98,700 to Harper during 201 at a price of $141,000. Harper still held $15,750 (transfer price) of this amou in inventory as of December 31, 2017. These goods are to be sold to outside parties during 2018. Kinman reported a $59,400 net loss and a $23,200 other comprehensive loss for 2017. The company still manages to declare and pay a $23,000 cash dividend during the year. During 2018, Kinman reported a $49,000 net income and declared and paida cash dividend of $25,000. It made additional inventory sales of $108,000 to Harper during the period. The original cost of the merchandise was $67,500. All but 30 percent of this inventory had been resold to outside parties by the end of the 2018 fiscal year Prepare all journal entries for Harper for 2017 and 2018 in connection with this investment. Assume that the equity method is applied. (If no entry is required for a transaction/event, select No journal entry required in the first account field. Do not round intermediate calculations.) (Ctrl-
Paragraph Sty w transaction list View journal entry worksheet No 01/01/2017 Investment in Kinman Co 228,600 Cash 228,60 1231/2017 Dividends receivablke 9.200 Investment in Kinman Co 9 20 1231/2017 Cash 9200 Dividends receivable 9200 4 1231/2017 Equity in Kinman income Other comprehensive loss of Kinman 23.760 9280 12/31/2017 Equity in Kinman income 3.350 Investment in Kinman Co 3.350 1231/2017 Equity in Kinman income investment in Kinman Co 12/31/2018 Dividends receivable 10.000 Investment in Kinman Co 10.000 0 12412018 Cesh Investment in Kinman Co Equity in Kinman income 12/31/2018 Equity in Kinman income nvestment in Kinman Co 10 12/31/2018 12/31/2018 Investment in Knman Co Equity in Kinman income 12 31/2018 Equity in Kinman income n Kinman
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