On 1 January 2017, Al Yousef Group acquired 30% of the outstanding voting shares of Saleh Enterprises for OMR 2,000,000 in cash, a price that was equal to 30% of Saleh's net assets. The investment gave Al Yousef significant influence over Saleh. During the year ending December 31, 2017, Saleh had Net Income of OMR 200,000 and paid dividends of OMR 40,000. For the year ending December 31, 2018, Saleh had a net income of OMR 250,000, and paid dividends of OMR 50,000. For the year ending December 31, 2019, Saleh's business started to have some operational issues that they had a Net Loss of OMR 25,000, however they still managed to pay dividends of OMR 10,000. For the year ending December 31, 2020, because of COVID-19, Saleh had a Net Loss of OMR 50,000 and no dividends have been paid for 2020. Please answer the following questions pertaining to Al Yousef Company: Questions No. 32, 33 and 34 What will be the journal entry to record their share in Saleh's net loss on December 31, 2019? a. Dr. Investment 7,500 and Cr. Loss on Investment 7,500 b. Dr. Loss on Investment 25,000 and Cr. Investment 25,000 c. Dr. Loss on Investment 7,500 and Cr. Investment 7,500 d. Dr. Investment 25,000 and Cr. Loss on Investment 25,000
On 1 January 2017, Al Yousef Group acquired 30% of the outstanding voting shares of Saleh Enterprises for OMR 2,000,000 in cash, a price that was equal to 30% of Saleh's net assets. The investment gave Al Yousef significant influence over Saleh. During the year ending December 31, 2017, Saleh had Net Income of OMR 200,000 and paid dividends of OMR 40,000. For the year ending December 31, 2018, Saleh had a net income of OMR 250,000, and paid dividends of OMR 50,000. For the year ending December 31, 2019, Saleh's business started to have some operational issues that they had a Net Loss of OMR 25,000, however they still managed to pay dividends of OMR 10,000. For the year ending December 31, 2020, because of COVID-19, Saleh had a Net Loss of OMR 50,000 and no dividends have been paid for 2020. Please answer the following questions pertaining to Al Yousef Company: Questions No. 32, 33 and 34 What will be the journal entry to record their share in Saleh's net loss on December 31, 2019? a. Dr. Investment 7,500 and Cr. Loss on Investment 7,500 b. Dr. Loss on Investment 25,000 and Cr. Investment 25,000 c. Dr. Loss on Investment 7,500 and Cr. Investment 7,500 d. Dr. Investment 25,000 and Cr. Loss on Investment 25,000
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
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On 1 January 2017, Al Yousef Group acquired 30% of the outstanding voting shares of Saleh Enterprises for OMR 2,000,000 in cash, a price that was equal to 30% of Saleh's net assets. The investment gave Al Yousef significant influence over Saleh. During the year ending December 31, 2017, Saleh had Net Income of OMR 200,000 and paid dividends of OMR 40,000. For the year ending December 31, 2018, Saleh had a net income of OMR 250,000, and paid dividends of OMR 50,000. For the year ending December 31, 2019, Saleh's business started to have some operational issues that they had a Net Loss of OMR 25,000, however they still managed to pay dividends of OMR 10,000. For the year ending December 31, 2020, because of COVID-19, Saleh had a Net Loss of OMR 50,000 and no dividends have been paid for 2020. Please answer the following questions pertaining to Al Yousef Company: Questions No. 32, 33 and 34
What will be the journal entry to record their share in Saleh's net loss on December 31, 2019?
a.
Dr. Investment 7,500 and Cr. Loss on Investment 7,500
b.
Dr. Loss on Investment 25,000 and Cr. Investment 25,000
c.
Dr. Loss on Investment 7,500 and Cr. Investment 7,500
d.
Dr. Investment 25,000 and Cr. Loss on Investment 25,000
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