Exercise 12-7 (Part Level Submission) Crown Point Corporation purchased 285,000

Question

Exercise 12-7 (Part Level Submission) Crown Point Corporation purchased 285,000 of the 950,000 common shares of Abacus Ltd. on October 1, 2018, at $2.90 per share. Near the end of the fourth quarter ended December 31, Abacus declared dividends on its common shares of $77,000 but payment will not be made until 2019. Abacus also announced that it had net income for the quarter ended December 31, 2018, of $203,000 Record the journal entries that Crown Point would make during the last quarter ended December 31, 2018, under the following assumptions:

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit Oct 1 Investment in abacus ltd 826500      Cash (285000*2.9) 826500 (To record investment) Dec 29 Dividend receivable (77000*285000/950000) 23100      Dividend income 23100 (To record dividend) Dec 31 No entry

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.