recording and reporting an equity method security 432426

Felicia Company acquired 21,000 of the 60,000 shares of outstanding common stock of Nueces Corporation during 2010 as a long term investment. The annual accounting period for both companies ends December 31. The following transactions occurred during 2010: Jan. 10 Purchased 21,000 shares of Nueces common stock at $12 per share. Dec. 31 Nueces Corporation reported net income of $90,000. Dec. 31 Nueces Corporation declared and paid a cash dividend of $0.60 per share. Dec. 31 Determined the market price of Nueces stock to be $11 per share. Requirement 2: Give the journal entries for each of these transactions. (Enter the transactions in the order given in the question. Omit the “$” sign in your response.) Requirement 3: Show how the long term investment and the related revenue should be reported on the 2010 financial statements of Felicia Company. (Omit the “$” sign in your response.) Balance Sheet At December 31, 2010 Long term Investments $ Income Statement For the Year Ended December 31, 2010 $