On January 2, Yorkshire Company acquired 29% of the outstanding stock of Fain Company for $440,000. For the year ended December 31, Fain Company earned income of $114,000 and paid dividends of $35,000. Prepare the entries for Yorkshire Company for the purchase of the stock, the share of Fain income, and the dividends received from Fain Company.

1. Jan 2 Dr Investment in Fain company stock$440,000

Cr Cash $440,000

2. Dec 31 Dr Investment in Fain company stock 33,060

Cr Income of Fain company 33,060

3. Dec 31 Dr Cash $10,150

Cr Investment in Fain company stock $10,150

Explanation:

Preparation of the entries for Yorkshire Company for the purchase of the stock, the share of Fain income, and the dividends received from Fain Company.

1.Preparation of the entries for Yorkshire Company for the purchase of the stock

Jan 2 Dr Investment in Fain stock$440,000

Cr Cash $440,000

2. Preparation of The journal entry for the share of Fain income

Dec 31 Dr Investment in Fain stock 33,060

Cr Income of Fain company 33,060

(29%* $114,000)

3. Preparation of the journal entry for the dividends received from Fain Company.

Dec 31 Dr Cash $10,150

Cr Investment in Fain company stock $10,150

(29%$35,000)

a progressive tax is a tax that imposes a lower tax rate on low-income earners compared to those with a higher income, making it based on the taxpayer's ability to pay. that means it takes a bigger percentage from high income earners than it does from low income people.