On August 4 2013 Osaka Corporation purchased 1 000 common shares
On August 4, 2013, Osaka Corporation purchased 1,000 common shares of Tremblay Ltée for $ 45,000. The following information applies to Tremblay’s shares:
Date Price
31/ 12/ 2013 ........$ 52
31/ 12/ 2014 .........47
31/ 12/ 2015 .........38
Tremblay declares and pays cash dividends of $ 2 per share on June 1 of each year.
Required:
1. Prepare journal entries to record the facts in the case, assuming that Osaka purchased the shares for the portfolio of securities held for trading.
2. Prepare journal entries to record the facts in the case, assuming that Osaka purchased the shares for the portfolio of SAS.
3. Prepare journal entries to record the facts in the case, assuming that Osaka used the equity method to account for the investment. Osaka owns 30 percent of Tremblay, and Tremblay reported $ 50,000 in net earnings each year.
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