At the beginning of 2020, Lahore Co., a publically listed entity, invests $500,000 to acquire 35% of Delhi Co.'s voting shares and significant influence over Delhi. On the investment date Lahore estimates Delhi holds depreciable assets with a fair value of $750,000 which is different to their $650,000 carrying value on Delhi's books. These depreciable assets have a remaining useful life of 10 years and Delhi uses straight-line depreciation.

 

Delhi reports the following for the year ending December 31, 2020:

• Income from continuing operations, $150,000;
• Loss [after income tax recovery of $17,143] from discontinued operations, -$40,000;
• FV-OCI gains, $30,000.

Delhi declares and pays dividends during 2020 in the amount of $90,000.

 

Required

Provide all journal entries Lahore Co. makes for its investment in Delhi Co. during 2020.

Answer rating: 100% (QA)

Based on the information provided Lahore Co has acquired 35 of Delhi Cos voting shares and significa... View the full answer