Please show work ! Flint Corp. was a 30% owner of Buffalo Company, holding 216,000 shares of Buffald's common stock on December 31, 2019. Theinvestment account had the following entries.Investment in Buffalo1/1/18 Cost$3.230,000 12/6/18 Dividend received$160,000380,000 12/5/19 Dividend received12/31/18 Share of income250,00012/31/19 Share of income490,000On January 2, 2020, Flint sold 108,000 shares of Buffalo for $3,470,000, thereby losing its significant influence. During the year 2020,Buffalo experienced the following results of operations and paid the following dividends to Flint.BuffaloDividends PaidIncome (Loss)to Flint2020$320,000$52,000At December 31. 2020, the fair value of Butffalo shares held by Flint is $1.980,000. This is the first reporting date since the January 2sale(b) Compute the carrying amount of the investment in Buffalo as of December 31. 2020 (prior to any tair value adjustment).Carrying amount1839000(c) Prepare the adjusting entry on December 31, 2020, applying the fair value method to Flint's long-term investment in BuffaloCompany securities (Credit occount titles are outomatically indented when amount is entered, Do not indent manuolly no entry srequirnd,select "No Entry for the account titles and enter Ofor the omounts)DateAccount Titles and ExplanationDebitCreditDec 31,2020FarValue Adiusment72000

The answer has been mentioned below.

Answered: Investment in Buffalo st $3,230.000…

Investment in Buffalo st $3,230.000 12/6/18 Dividend received $160,000 Share of income 380,000 12/5/19 Dividend received 250,000 Share of income 490,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 21P

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Question

Please show work !

Flint Corp. was a 30% owner of Buffalo Company, holding 216,000 shares of Buffald's common stock on December 31, 2019. The
investment account had the following entries.
Investment in Buffalo
1/1/18 Cost
$3.230,000 12/6/18 Dividend received
$160,000
380,000 12/5/19 Dividend received
12/31/18 Share of income
250,000
12/31/19 Share of income
490,000
On January 2, 2020, Flint sold 108,000 shares of Buffalo for $3,470,000, thereby losing its significant influence. During the year 2020,
Buffalo experienced the following results of operations and paid the following dividends to Flint.
Buffalo
Dividends Paid
Income (Loss)
to Flint
2020
$320,000
$52,000
At December 31. 2020, the fair value of Butffalo shares held by Flint is $1.980,000. This is the first reporting date since the January 2
sale
(b) Compute the carrying amount of the investment in Buffalo as of December 31. 2020 (prior to any tair value adjustment).
Carrying amount
1839000
(c) Prepare the adjusting entry on December 31, 2020, applying the fair value method to Flint's long-term investment in Buffalo
Company securities (Credit occount titles are outomatically indented when amount is entered, Do not indent manuolly no entry srequirnd,
select "No Entry for the account titles and enter Ofor the omounts)
Date
Account Titles and Explanation
Debit
Credit
Dec 31,
2020
FarValue Adiusment
72000

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