FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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On January 1, 2011, Papa Doc Donuts, purchased 30,000 shares of Frenchie's Beignets for $5 per share. This purchase gives Papa Doc Donuts a 7.5% stake in Frenchie's Beignets. On January 1, 2013, Papa Doc Donuts purchased an additional 90,000 shares for $6 per share gaining an additional 22.5% stake in Frenchie's Beignets. This latest purchase gave Papa Doc Donuts the ability to apply significant influence over Frenchie's Beignets. The original 7.5% investment was categorized and accounted for as an available for sale security. Frenchie's Beignets reports net income cash dividends and per share prices as follows. These amounts are assumed to have occurred evenly throughout these years. Cash dividends are declared and paid in the same period. Per Share Price Cash Dividends $180,000 (December 31st Spot Rate) $6.50 Year Net Income $600,000 $520,000 $480,000 $515,000 S605,000 2011 $190,000 $5.50 $7.00 $7.50 $9.00 2012 2013 $145,000 $145,000 $165,000 2014 2015 On March 31, 2015, Papa Doc sells 12,000 shares of Frenchie's Beignets capital stock for $8.50 per share. 5.) Prepare Pap Doc Donuts December 31, 2013 journal entry(s)
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Transcribed Image Text:On January 1, 2011, Papa Doc Donuts, purchased 30,000 shares of Frenchie's Beignets for $5 per share. This purchase gives Papa Doc Donuts a 7.5% stake in Frenchie's Beignets. On January 1, 2013, Papa Doc Donuts purchased an additional 90,000 shares for $6 per share gaining an additional 22.5% stake in Frenchie's Beignets. This latest purchase gave Papa Doc Donuts the ability to apply significant influence over Frenchie's Beignets. The original 7.5% investment was categorized and accounted for as an available for sale security. Frenchie's Beignets reports net income cash dividends and per share prices as follows. These amounts are assumed to have occurred evenly throughout these years. Cash dividends are declared and paid in the same period. Per Share Price Cash Dividends $180,000 (December 31st Spot Rate) $6.50 Year Net Income $600,000 $520,000 $480,000 $515,000 S605,000 2011 $190,000 $5.50 $7.00 $7.50 $9.00 2012 2013 $145,000 $145,000 $165,000 2014 2015 On March 31, 2015, Papa Doc sells 12,000 shares of Frenchie's Beignets capital stock for $8.50 per share. 5.) Prepare Pap Doc Donuts December 31, 2013 journal entry(s)
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