ACC 307 5-2 Homework 3 - On January 1 2013 Beilich...

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On January 1, 2013, Beilich Enterprises bought 20% of the outstanding common stock of Wolfe Construction Company for $740 million cash. Wolfe’s net income for the year ended December 31, 2013,was $370 million. During 2013, Wolfe declared and paid cash dividends of $74 million. Beilich recorded the investment as follows:Genernal JournalDebitCreditPurchaseInvestment in Wolfe Construction shares740 Cash740 Net incomeInvestment in Wolfe Construction shares (20% × $370 million)74 Investment revenue74 Dividends

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