Question: FYY Limited purchased 500 shares of Humor Inc for

FYY Limited purchased 500 shares of Humor Inc. for $ 6,000 plus $ 500 in commission. The shares had a fair value of $ 19,000 at the end of 20X1, $ 25,000 at the end of 20X2, and $ 40,000 at the end of 20X3. In 20X4, the shares were sold for $ 31,000 less $ 500 in commission. In each of 20X1, 20X2 and 20X3, dividends of $ 1,200 were received.

Prepare journal entries for 20X1 to 20X4, if the company uses the:
a. Cost method.
b. Fair value through other comprehensive income method; realized amounts are transferred to retained earnings.

View Solution:

Sale on SolutionInn
  • CreatedFebruary 17, 2015
  • Files Included
Post your question