Question 4 On January 1, 2018, your company acquires 10,000 shares of Investee Business Limited ("IBL"), representing 40% of the shares of IBL, for $200,000. As part of that investment, your company is entitled to appoint one director to the four-member Board of Directors. For the year ended December 31, 2018, IBL earns $400,000 of profit (net income) and no other comprehensive income. On January 2, 2019, IBL declares and pays dividends of $80,000 to all shareholders. REQUIRED Prepare journal entries for the following dates: (a) January 1, 2018; (b) December 31, 2018; and (c) January 2, 2019.

Question 4 On January 1, 2018, your company acquires 10,000 shares of Investee Business Limited ("IBL"), representing 40% of the shares of IBL, for $200,000. As part of that investment, your company is entitled to appoint one director to the four-member Board of Directors. For the year ended December 31, 2018, IBL earns $400,000 of profit (net income) and no other comprehensive income. On January 2, 2019, IBL declares and pays dividends of $80,000 to all shareholders. REQUIRED Prepare journal entries for the following dates: (a) January 1, 2018; (b) December 31, 2018; and (c) January 2, 2019.

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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Problem 3-12 On January 1, 2019, an entity granted to a senior executive 20,000 share options, conditional upon the executive’s remaining in the entity’s employ until December 31, 2021. The par value per share is P50. The exercise price is P100. However, the exercise drops to P80 if the entity’s earnings increase by at least an average of 10% per year over the three-year period. On grant date, the entity estimates that the fair value of the share option is P30 if the exercise price is P80. If the exercise price is P100, the fair value of the share option is P25. During 2019 and 2020, the earnings increased by 12% and 11% respectively. However, during 2021, the earnings increased only by 4%. Required: A. Prepare journal entries from 2019 to 2021
Problem 11. On May 5, 2019, MacDougal Corp. exchanged 2,000 shares of its P25 par value ordinary treasury shares for a patent owned by Masset Co. The treasury shares were acquired in 2018 for P45,000. At May 5, 2019, MacDougal's ordinary shares was quoted at P38 per share, and the patent had a carrying value of P68,000 on Masset's books. MacDougal should record the patent at what amount?
Situation 1Waterway Cosmetics acquired 10% of the 189,000 shares of common stock of Martinez Fashion at a total cost of $12 per share on March 18, 2020. On June 30, Martinez declared and paid $77,300 cash dividend to all stockholders. On December 31, Martinez reported net income of $122,300 for the year. At December 31, the market price of Martinez Fashion was $13 per share.Situation 2Wildhorse, Inc. obtained significant influence over Seles Corporation by buying 30% of Seles’s 32,100 outstanding shares of common stock at a total cost of $9 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $32,700 to all stockholders. On December 31, Seles reported a net income of $78,800 for the year.Prepare all necessary journal entries in 2020 for both situations.
Item 1 Item Details When the financial controller was providing details on the employee share schemes at Knappa, it was identified that share options granted to the production staff on 1 July 2022 were not accounted for in the year ended 30 June 2023 financial statements. On 1 July 2022, 1,000 share options were granted to each of Knappa's 30 production employees, on the condition that the employees remain with the company for the next two years and that the share price increases from $26.50 per share on 1 July 2022 to $35 per share on 30 June 2024. If the share price target at 30 June 2024 is achieved, the share options can be exercised at any time over the subsequent 12 months (ie up to 30 June 2025). The fair value of each share option at the grant date was $5.60. You have obtained the following information: Year Number of employees who departed during the year No of employees expected to depart in future years 30.06.2023¹ 30.06.2024 1. This information was obtained at 30 June 2023;…
Question 3 Happy Berhad owns 40% interest in the equity capital of Merry Berhad. During the year ended 31 December 2021, intercompany sales of goods with the associate totalled RM5 million. At year-end, stocks attributable to RM1 million intercompany sales were held by the buyer. The gross profit margin to the seller was 50% on selling price. Assume an income tax rate of 28% and that full tax effect accounting applies. Required: In respect of the above intercompany sales of goods, show the consolidation adjustments required if: a. The transactions were downstream sales (investor to associate) and b. The transactions were upstream sales (associate to investor).
22-On January, 2019, ABC Company acquired 30% percent of the voting shares of XYZ Company for OMR 300,000. The investment gives ABC, significant influence over the affairs of XYZ Company. During the year ending December 31, 2019, XYZ Company earned OMR 100,000 Net Income and paid dividend of OMR 70,000. What is the journal entry in the books of ABC Company for the share in the net income under equity method? a. Debit Cash Account OMR 21,000; Credit Investment Income Account OMR 21,000 b. Debit Investment Account OMR 30,000; Credit Investment Income Account OMR 30,000 c. Debit Cash Account OMR 30,000; Credit Investment Account OMR 30,000 d. Debit Investment Account OMR 21,000; Credit Dividend Income Account OMR 21,000 Clear my choicevvv
Question 58 Choose the correct answer from the choices.
Situation 1 Pharoah Tables acquired 15% of the 4,800,000 shares of common stock of Robot Sofas at a total cost of $7.80 per share on April 1, 2025. On August 8, Robot Sofas declared and paid a $267,000 cash dividend. On December 31, Robot Sofas market price was $8.30 per share and the company reported net income of $625,000 for the year. Situation 2 On January 1, 2025, Coronado Company purchased 40% of Santos Corporation 525,000 outstanding shares of common stock at a total cost of $14 per share. On October 25, Santos declared and paid a cash dividend of $0.40 per share. On December 31, Santos reported a net income of $928,000 for the year and the market price of its common stock was $15 per share. Prepare all necessary journal entries in 2025 for both situations. (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. List all debit entries…
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