xountitled presentation on Pre Chapter 15 Assignment M McGraw-Ha Cornect Stud @M

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xountitled presentation on Pre Chapter 15 Assignment M McGraw-Ha Cornect Stud @My presentations Prezi O ezto.mheducation.c × × C Chapter 15 Assignment Questions 5-6 (of 8 Problem 15-4A Accounting for long-term investments in securities; with and without significant influence LO The following information applies to the questions displayed below Selk Steel Co, which began operations on January 4, 2015, had the folowing subsequent transactions and events in its long-term investments. 2015 Jan. 5 Selk purchased 40000 shares (20% of total) of Kildare's common stock for $1.200,000. Oct. 23 Kildsire declered and paid a cash dividend of $4.20 per share Dec. 31 Kildsire's net income for 2015 is $1264,000, and the fair value of its stock at December 31 is $31.00 per share 2016 Oct. 15 Kidare declared and pad·cash dividend of S310 per share. Dec. 31 Kildaire's net income for 2016 is $1,576,000, and the fair value of its stock at December 31 is $33.00 per share 2017 Jan. 2 Selk sold all of its investment in Kildaire for $1665,000 cash. Section Break Problem 15-4A Accounting for long-term Investments in securities; with and without significant influence LO P3, P4 4

Explanation / Answer

2015-journal entries

Jan 5 Investment in shares a/c dr 1200000$

To Bank a/c 1200000$

(being 40000shares of kildaires entity purchased at 30$)

oct 23 bank a/c dr 168000$   

(40000shares*4.2)

To dividend a/c 168000$

(Being cash dividend received)

year 2016

oct 15 bank a/c dr 124000$   

(40000shares*3.1)

To dividend a/c 124000$

(Being cash dividend received)

year 2017

jan 2 bank a/c dr 1665000$

To Investment in shares a/c 1200000$

To Profit and loss a/c 465000$

(Being investments sold)

jan 2 no entry for change in fair value

  

  

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