Kudos Corporation Bought a 40% Interest in the Voting Stock

question 3

Essay

Kudos Corporation bought a 40% interest in the voting stock of Nutribar Corporation's $1 par value common stock for $20 million, in exchange for 2 million shares at a $10 market price, on March 31, 2014. On December 12, 2014, Nutribar declared and paid a $1 million cash dividend and reported net income for the year ended 2014 of $10 million. On December 31, 2014, Nutribar's stock was trading at $11.50 per share.
Required:
A. Record the journal entry on Kudos' book for the acquisition of Nutribar on March 31, 2014.
B. Record the cash dividend received by Kudos on December 12, 2014.
C. Record any end of year entries needed on Kudos' books.

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Definitions:

Buffet Revenue

Income generated from selling all-you-can-eat meal services, typically seen in restaurants that offer buffet-style dining.

All-You-Can-Eat

A service model usually found in restaurants where customers pay a fixed price and can consume as much food as they desire.

Equity Market

A marketplace where shares of publicly held companies are issued and traded, either through exchanges or over-the-counter markets.

Bond Market

A financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market.