2. M Company and B Incorporation formed MB Ltd., a joint venture, on January 1, 2021. M Co. invested equipment with a carrying amount of $900,000 (original cost was $1, 100, 000 and accumulated depreciation was $200,000) and a fair value of $1,020,000 for a 40% interest in JV Ltd., while B Co. contributes technology with a fair value of $1,530,000 for a 60% interest in JV Ltd. The equipment has an estimated useful life of 10 years. On December 31, 2021, JV Ltd. reported a net income of $204, 000. On February 28, 2022, MB Ltd. declared dividends of $180,000. On April 10, 2022, MB Ltd. paid dividends Required: Journal entry for M Company and B Incorporation in 2021 and 2022.

2. M Company and B Incorporation formed MB Ltd., a joint venture, on January 1, 2021. M Co. invested equipment with a carrying amount of $900,000 (original cost was $1, 100, 000 and accumulated depreciation was $200,000) and a fair value of $1,020,000 for a 40% interest in JV Ltd., while B Co. contributes technology with a fair value of $1,530,000 for a 60% interest in JV Ltd. The equipment has an estimated useful life of 10 years. On December 31, 2021, JV Ltd. reported a net income of $204, 000. On February 28, 2022, MB Ltd. declared dividends of $180,000. On April 10, 2022, MB Ltd. paid dividends Required: Journal entry for M Company and B Incorporation in 2021 and 2022.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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