On January 1, Cullumber Corporation purchased a 25% equity investment in Shane Corporation for $160,100. At December 31, Shane declared and paid a $80,200 cash dividend and reported net income of $358,400. Required:
Journalize the transactions.

Date                     Account Title                                       Debit            Credit

January, 1            Stock Investment                              $160,100

                             Cash                                                                         $160,100

Date                     Account Title                                         Debit             Credit

December, 1         Stock Investment                               $89,600

                             Revenue from Stock Investment                           $89,600

Working:

= Shane net income * Cullumber ownership

= 358,400 * 25%

= $89,600

Date                     Account Title                                         Debit             Credit

December, 1         Cash                                                    $20,050

                             Stock Investment dividend receivable                 $20,050    

Working:

= Dividend * Cullumber ownership

= 80,200 * 25%

= $20,050

answer; the above statement is (true);