Please help with this question, I need to understand how to arrive to the journal entries requested. Are as follows:
1) record the cost of 27600 shares of Sumter Company
2) record the annual dividends declared and received from Sumter Company. Because declaration and payment are on the same day a dividend receivable account is unnecessary
3) Record the annual dividend declared and received from Sumter Company
4) Record the cost of 110,400 additional shares of Sumter Company
5) Record the entry to recognize the retrospective effect of the change to equity method
6) Record the annual dividend declared and received from Sumter
7) Record the accrued 2015 income based on 40% ownership of Sumter.