1. On October 1, 2009, Marcus Corporation purchased $20,000 of 6% bonds of Roberts Corporation, due in 8 1/4 years. The bonds were purchased at a price of $17,561 plus interest of $300 accrued from July 1, 2009, the date of the last semi-annual interest payments. Journalize the purchase of the bonds plus interest.
2. On January 2, Todd Company acquired 40% of the outstanding stock of McGuire Company for $205,000. For the year ending, December 31, McGuire earned income of $48,000 and paid dividends of $14,000.
Prepare the entries for Todd Compaany for the purchase of the stock, share of McGuire income and dividends received from McGuire.
3. Fortune Corporation's comparative balance sheet for current assets and liabilities was as follows:
- Dec 31,2010:
- Accounts receivable 7,500...Inventory 11,500...Accounts payable 4,300...dividends payable 4,000.
- Dec 31,2009:
- Accounts receivable 5,200...Inventory 16,000...Accounts payable 5,200...dividends payable 3,000.
- Net income was $65,000. Prepare the cash flows from operating activities section of the Statement of Cash Flows.