Ex. 193
On January 1 Jett Corporation purchased a 30% equity in Dexter Corporation for €220,000. At December 31 Dexter declared and paid a €60,000 cash dividend and reported net income of €200,000.
Instructions
(a) Journalize the transactions.
(b) Determine the amount to be reported as an investment in Dexter at December 31.
Ex. 194
Presented below are two independent situations.
1.Grand Cosmetics acquired 10% of the 200,000 ordinary shares of Cey Fashion at a total cost of $12 per share on March 18, 2014. On June 30, Cey declared and paid a $60,000 dividend. On December 31, Cey reported net income of $110,000 for the year. At December 31, the market price of Cey Fashion was $15 per share. The shares are classified as non-trading.
2.Unruh, Inc., obtained significant influence over Olsen Corporation by buying 25% of Olsen's 40,000 outstanding ordinary shares at a total cost of $7 per share on January 1, 2014. On June 15, Olsen declared and paid a cash dividend of $30,000. On December 31, Olsen reported a net income of $80,000 for the year.
Instructions
Prepare all the necessary journal entries for 2014 for (a) Grand Cosmetics and (b) Unruh, Inc.
Ex. 195
At December 31, 2014, the non-trading securities for Milner, Inc. are as follows.
Security Cost Fair Value
X$27,500$23,000
Y 12,500 14,000
Z 23,000 19,000
$63,000$ 56,000
Instructions
(a)Prepare the adjusting entry at December 31, 2014, to report the securities at fair value.
(b)Show the statement of financial position and income statement presentation at December 31, 2014, after adjustment to fair value. The securities are considered to be a long-term investment.
securities $ (7,000)