Question -
On January 1, 2018, McCoy Corporation purchased 300,000 of the outstanding common shares of Sulu Corporation for $12 per share cash. During 2018, Sulu Corporation paid cash dividends to shareholders of $1.20 per share and reported net income of $4,400,000. On December 31, 2018, the fair market value of the Sulu shares was $18 per share.
REQUIRED:
A. Give all of the necessary journal entries required for the year 2018 to account for McCoy's investment in the Sulu common stock.
B. Indicate the accounts and their balances that would appear on McCoy's 2018 financial statements related to the investment.