On January 1, 2015, Bactin Corporation acquired 10% ofOakton Company for $100,000. On that date, the totalbook value and fair value of Oakton's net assets was$900,000. Any difference between cost and fair value isattributable to goodwill. In 2015, Oakton reported netincome of $60,000 and paid dividends of $30,000. OnJanuary 1, 2016, Bactin Corporation bought another 10%of Oakton for $100,000, and on that date, the book valueand fair value of Oakton's net assets still was $900,000(the fair value of Oakton did not change during 2015).Bactin concluded that its 20% ownership now allowed itto significantly influence Oakton's operations. In 2016,Oakton reported net income of $80,000 and paiddividends of $40,000.Required:Prepare all journal entries for Bactin for 2015 and 2016,assuming no change in fair value of the Oakton stockduring that time period.

A key accounting concept known as a journal entry is used to meticulously and systematically…

Answered: Prepare all journal entries for Bactin…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

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Chapter1: Financial Statements And Business Decisions

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Prepare all journal entries for Bactin for 2015 and 2016, assuming no change in fair value of the Oakton stock during that time period.