Question 1: On January 1, 2022, Coyote Corporation purchased 30% of the commonshares of Roadrunner Limited for $860,000. On that date, the shareholder's equity ofRoadrunner was $1,000,000 in common shares and $1,100,000 in retained earnings. Allthe net assets for Roadrunner had fair values equal to their book values except for:Book value$1,300,000Building (remaining 5-year life)The following related to Roadrunner since the acquisition date:Net Income$400,000$170,000Year20222023Dec. 31In 2023, there was a goodwill impairment loss equal to 20% of its balance.Required: Prepare all the journal entries that Coyote should make regarding itsinvestment in Roadrunner, for 2022 and 2023. Show its amount on the balance sheet as ofyear end 2023.Journal entries - 2022Jan. 1Dec. 31Dec. 31Journal entries - 2023Dec. 31Fair value$1,500,000Dec. 31Dec. 31Dividends paid$210,000$190,000Investment amount (balance sheet), 2023 year-end

A journal entry is a recorded summary of a commercial transaction or occurrence. In layman's words,…

Answered: Required: Prepare all the journal…

Required: Prepare all the journal entries that Coyote should make regarding its investment in Roadrunner, for 2022 and 2023. Show its amount on the balance sheet as of year end 2023.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 24E

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