Exercise 12-7 (Part Level Submission) Greencastle Corporation purchased 240,000

Question

Exercise 12-7 (Part Level Submission) Greencastle Corporation purchased 240,000 of the 960,000 common shares of Abacus Ltd. on October 1, 2018, at $2.40 per share. Near the end of the fourth quarter ended December 31, Abacus declared dividends on its common shares of $76,000 but payment will not be made until 2019. Abacus also announced that it had net income for the quarter ended December 31, 2018, of $214,000 Record the journal entries that Greencastle would make during the last quarter ended December 31, 2018, under the following assumptions: ? (a) Your answer is partially correct. Try again. Greencastle has significant influence over Abacus and uses the equity method to account for this investment. (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.) Date Account Titles and Explanation Debit Credit 576,000 Cash 576,000 Dec. 29 IDividends Recelvable 53,500 53,500 Dec. 31Investment in Associates 19,000 Income from Associates 19,000 SHOW LIST OF ACCOUNTS LINK TO TEXT Attempts: 1 of 3 used AVE FOR LATER SUBMIT ANSWER

Explanation / Answer

Answer 1

Answer 12-5

(a)

(b)

01-10-2018 Investment in Associates Dr            5,76,000 Cash Cr            5,76,000 31-12-2018 Investment in Associates Dr                53,500 Income from Associates Cr                53,500 29-12-2018 Dividend Receivable Dr                19,000 Investment in Associates Cr                19,000

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