E4. On 17 March 20X6, Thanushan Company makes aninvestment of $815,000 to purchase 40% of the shares ofSheth Ltd. The purchase results in significant influenceover Sheth Ltd. Sheth declared paid dividends totalling$12,000 on 30 June 20X6. Sheth Ltd had earnings of$68,000 for the year. Required: Prepare the journalentries required for 20X6 using the equity method.Prepare the journal entry required on 17 March 20X6 byThanushan:Prepare the journal entry required to record the receiptof dividends from Sheth:Prepare the journal entry required to record Thanushan'sshare of Sheth's earnings:

When a company purchase stocks of other company that represents 20%-50% of total stockholding of…

Answered: Prepare the journal entry required on…

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

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 1MC

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On April 1, 2024, Sheridan Company purchased 34,400 common shares in Ecotown Ltd. for $18 per share. Management has designated the investment as FVTOCI. On December 5, Ecotown paid dividends of $0.10 per share and its shares were trading at $20 per share on December 31. Prepare the required entries to record the purchase, dividends, and year-end adjusting journal entry (if any) for this investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries) Date 10 Account Titles Debit Credit
1. ABC Co purchases 10,000 XYZ Inc., shares for P100 per share on April 9, 20x1. On March 31, 20x1, XYZ Inc. declares cash dividend of P8 per share to shareholders of record on April 15, 20x1. The dividends will be distributed on April 31, 20x1. The investment is measured at FVPL. Requirement: Prepare Journal Entries on April 9 and April 30, 20x1. 2. ABC Co purchases 10,000 XYZ Inc. shares for P100 per share on April 27, 20x1. On March 31, 20x1, XYZ Inc. declares cash dividend of P8 per share to shareholders of record on April 15, 20x1. The dividends will be distributed on April 31, 20x1. The investment is measured at FVPL. Prepare Journal Entries on April 9 and April 30, 20x1. Requirement: Prepare Journal Entries on April 27 and April 30, 20x1. 3. ABC Co holds 10,000 shares of XYZ Inc. as Investment in equity securities. On April 1, 20x1, ABC Co receives land with accost of P1,000,000 and fair value of P1,300,000 as property dividend. Requirement: Prepare Journal Entries on April1. 4.…
On April 1, 2024, Sandhill Company purchased 46,400 common shares in Ecotown Ltd. for $13 per share. Management has designated the investment as FVTOCI. On December 5, Ecotown paid dividends of $0.10 per share and its shares were trading at $15 per share on December 31. Prepare the required entries to record the purchase, dividends, and year-end adjusting journal entry (if any) for this investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date Save for Later Account Titles Debit Credit Attempts: 0 of 1 used Submit Answer
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On 3 September 2020, Debussy Ltd purchase 40,000 $1 listed equity shares of Red Copper Ltd at a price of $3 per share. Transaction costs were $5,000. At the year end of 31 December 2020, these shares were trading at $3.50. Debussy Ltd holds an active trading portfolio and the shares in Red Copper Ltd are acquired principally for the purpose of short-term profit. Required: Provide the accounting entries to account for initial and subsequent measurement of the share investment in Red Copper Ltd, in accordance with IFRS 9 / AASB 9 Financial Instruments. (narrations are not required). ANSWER HERE: Date Account Name Debit Credit
Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $146,000. On that date, the fair value of the noncontrolling interest was $36,500, and Slice reported retained earnings of $44,000 and had $92,000 of common stock outstanding. Pizza has used the equity method in accounting for its investment in Slice. Trial balance data for the two companies on December 31, 20X5, are as follows: Pizza Slice Corporation Debit $ Products Company Debit $ 82,000 109,000 82,000 164,000 Item Credit Credit 88,000 277,000 82,000 507,000 176, 200 119,000 20,000 10,000 44,000 Cash & Receivables Inventory Land Buildings & Equipment Investment in Slice Products Company Cost of Goods Sold Depreciation Expense Inventory Losses Dividends Declared 44,000 10,000 6,000 22,000 $ 193,000 Accumulated Depreciation Accounts Payable Notes Payable Common Stock 40,000 266,920 285,000 299,000 207,000 32,280 $ 70,000 15,000 155,000 92,000 82,000 105,000 Retained Earnings Sales Income…
On May 20, Montero Company paid $180,000 to acquire 55 shares (9%) of ORD Corporation as a long-term investment. On August 5, Montero sold one-tenth of the ORD shares for $20,500. 1. Prepare entries to record both the acquisition and the sale of these shares. 2. Should this stock investment be reported at fair value or at cost on the balance sheet? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare entries to record both the acquisition and the sale of these shares. View transaction list Journal entry worksheet 1 2 > On May 20, Montero Company paid $180,000 to acquire 55 shares (9%) of ORD Corporation as a long-term investment. Note: Enter debits before credits. Date General Journal Debit Credit May 20 Record entry Clear entry View general journal

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Prepare the journal entry required on 17 March 20X6 by Thanushan: Prepare the journal entry required to record the receipt of dividends from Sheth: Prepare the journal entry required to record Thanushan's share of Sheth's earnings: