Assume the same facts as in QS except that the stock acquired represents 40% of BBE Corp.s
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In QS, On May 20, 2011, Chiu Co. paid $1,500,000 to acquire 25,000 common shares (10%) of BBE Corp. as a long-term investment. On August 5, 2012, Chiu sold one-half of these shares for $937,500.
(a) The receipt of the dividend
(b) The December 31, 2011, year-end adjustment required for the investment account.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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