FINANCIAL ACCT-CONNECT
8th Edition
ISBN: 9781266627903
Author: Wild
Publisher: INTER MCG
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Equity method journal entries (price equals book value)
Prepare journal entries for the transactions below relating to an Equity Investment accounted for using the equity method.
a. An investor purchases 14,400 common shares of an investee at $16 per share; the shares represent 25% ownership in the investee and the investor concludes that it can exert significant influence over the
investee.
b. The investee reports net income of $172,800.
c. The investor receives a cash dividend of $1.50 per common share from the investee.
d. The investor sells all 14,400 common shares of the investee for $260,280.
General Journal
Ref.
Description
Debit
Credit
a.
b.
C.
d.
Equity investment
Chapter 15
McDaniel Corporation manufactures surveying equipment. Journalize the entries to record the following selected equity investment
transactions completed by McDaniel during 2019:
February 26
Purchased for cash 1,350 shares of Demon Inc. stock for $70 per share plus a $75 brokerage commission.
April 16
Received dividends of $0.75 per share on Demon Inc. stock.
June 18
Purchased 600 shares of Demon Inc. stock for $68 per share plus a $50 brokerage fee.
August 19
Sold 1,500 shares of Demon Inc. stock for $72 per share less a $100 brokerage commission. McDaniel assumes that
the first investments purchased are the first investments sold.
November 14
Received dividends of $0.44 per share on Demon Inc. stock.
please prepare the journal entries
Q1. Sold 22,500 Treasury shares at $2 each.
Q2. Purchased 10% shareholding in Charlie Limited, a supplier, as a long-term investment. The fair value of the 10% shareholding was $2,900,000 as at 1 March. The purchase consideration included a $2,700,000 note receivable due from Charlie Limited and the related interest receivable balance of $144,000, $140,000 cash and a motor vehicle owned by ITI. The motor vehicle was originally obtained at $120,000. ( for depreciation details, refer to Q1 of additional information.)
Q3. A 10% share dividend was declared when the market value per share was $2.1.
Q4. Paid cash to acquired 30,000 shares of its own at $2.3 each. ITI intends to keep the shares for several months for management bonus.
Chapter C Solutions
FINANCIAL ACCT-CONNECT
Ch. C - Under what two conditions should investments be...Ch. C - Prob. 2DQCh. C - Prob. 3DQCh. C - Identify the three classes of debt investments and...Ch. C - Prob. 5DQCh. C - Prob. 6DQCh. C - Prob. 7DQCh. C - Prob. 8DQCh. C - Prob. 9DQCh. C - Prob. 10DQ
Ch. C - Prob. 11DQCh. C - Prob. 12DQCh. C - Prob. 13DQCh. C - Prob. 14DQCh. C - Prob. 15DQCh. C - Prob. 16DQCh. C - Prob. 17DQCh. C - Which of the following statements a through g are...Ch. C - Prob. 2QSCh. C - Prob. 3QSCh. C - Prob. 4QSCh. C - Prob. 5QSCh. C - Prob. 6QSCh. C - Prob. 7QSCh. C - Prob. 8QSCh. C - Prob. 9QSCh. C - Prob. 10QSCh. C - Prob. 11QSCh. C - Prob. 12QSCh. C - Prob. 13QSCh. C - Prob. 14QSCh. C - Prob. 15QSCh. C - Prob. 16QSCh. C - Prob. 17QSCh. C - Prob. 1ECh. C - Prob. 2ECh. C - Prob. 3ECh. C - Prob. 4ECh. C - Prob. 5ECh. C - Prob. 6ECh. C - Prob. 7ECh. C - Prob. 8ECh. C - Prob. 9ECh. C - Prob. 10ECh. C - Prob. 12ECh. C - Prob. 13ECh. C - Prob. 14ECh. C - Prob. 15ECh. C - Prob. 16ECh. C - Prob. 2PSACh. C - Prob. 6PSACh. C - Prob. 2PSBCh. C - Prob. 3PSBCh. C - Prob. 5PSBCh. C - Prob. 6PSBCh. C - Prob. CSPCh. C - Prob. 4BTNCh. C - Prob. 9BTN
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Stockholders Equity: How to Calculate?; Author: Accounting University;https://www.youtube.com/watch?v=2jZk1T5GIlw;License: Standard Youtube License