On December 31,Year 1,Winnipeg Corp Purchased 8,000 Shares of Bittner

question 46

Essay

On December 31,Year 1,Winnipeg Corp purchased 8,000 shares of Bittner Corp's common shares.This purchase represented 35% of Bittner's outstanding shares and gave Winnipeg significant influence over Bittner's management and operations.On October 11,Year 2,Bittner declared and paid cash dividends of $50,000.On December 31,Year 2,Bittner reported net income of $90,000 for the year.Prepare the Year 2 journal entries Winnipeg Corp should prepare to account for its investment in Bittner Corp.

---

Definitions:

Contractual Systems

The collection of legal agreements used in franchising, distribution, and other business arrangements that define the terms of relationships between parties.

Franchising

Franchising is a method of doing business wherein a franchisor grants the rights to an individual or entity (franchisee) to operate a business model using the franchisor’s brand and system.

Contractual System

A system based on legal agreements between parties that govern their business relationships and transactions.

Self-Service

A business model or system where customers perform actions or obtain services by themselves, often facilitated by technology, without direct assistance from staff.