Investments in Stocks--Equity Method or FVTOCI Financial Assets--EquityAccording to the statements, prepare the appropriate journał entries, and calculate the differences..Tony Ltd. acquired 30% of the outstanding ordinary shares of Chang Company on January 1, 2018, bypaying $900,000 for the 90,000 shares. Chang declared and paid $0.15 per share cash dividends onMarch 15, June 15, September 15, and December 15, 2018. Chang reported net income of $160,000 forthe year. At December 31, 2018, the market price of Chang ordinary shares was $12per share.Required:1. Prepare the journal entries for Tony Ltd. for 2018, assuming Tony Ltd. cannot exercise significantinfluence over Chang, and Tony Ltd. made an irrevocable election to treat the equity investmentas fair value through other comprehensive income.2.: Prepare the journal entries for Tony Ltd. for 2018, assuming Tony Ltd. can exercise significantinfluence over Chang.Tadicate the statement of financial position and income statement account balances at December3.31, 2018, under each method of accounting.

Comprehensive income: Any change in the net assets of the company because of non-owner sources in…

Required: 1. Prepare the journal entries for Tony Ltd. for 2018, assuming Tony Ltd. cannot exercise significant influence over Chang, and Tony Ltd. made an irrevocable election to treat the equity investment as fair value through other comprehensive income. 2: Prepare the journal entries for Tony Ltd. for 2018, assuming Tony Ltd. can exercise significant influence over Chang. Indicate the statement of financial position and income statement account balances at December 3. 31, 2018, under each method of accounting.

Required: 1. Prepare the journal entries for Tony Ltd. for 2018, assuming Tony Ltd. cannot exercise significant influence over Chang, and Tony Ltd. made an irrevocable election to treat the equity investment as fair value through other comprehensive income. 2: Prepare the journal entries for Tony Ltd. for 2018, assuming Tony Ltd. can exercise significant influence over Chang. Indicate the statement of financial position and income statement account balances at December 3. 31, 2018, under each method of accounting.

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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