P1-25 - 25. (Preparation of journal entries for two years,...

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25. (Preparation of journal entries for two years, includes losses and intercompany transfers of inventory) Journal Entries for Hobson Co. 1/1/08 Investment in Stokes Co. ............. 210,000 Cash . ........................................ 210,000 (To record initial investment) During Cash. .............................................. 4,000 2008 Investment in Stokes Co. ........ 4,000 (To record receipt of dividend) 12/31/08 Equity in Stokes Income—Loss . . 16,000 Extraordinary Loss of Stokes. ..... 8,000 Investment in Stokes Co. ........ 24,000 (To record accrual of income as earned by equity investee, 40% of reported balances) 12/31/08 Equity in Stokes Income—Loss . . 3,300 Investment in Stokes Co. ........ 3,300 (To record amortization relating to acquisition of Stokes—see Schedule 1 below) 12/31/08 Equity in Stokes Income-Loss. .... 2,000 Investment in Stokes Co. ........ 2,000 (To defer unrealized gain on intercompany sale see Schedule 2 below) During Cash. .............................................. 4,800
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P1-25 - 25. (Preparation of journal entries for two years,...

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