Sam Ltd acquired 35% interest in Song Ltd for $150,000 on 1 July 2012. Profits and Dividends
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Question:
Sam Ltd acquired 35% interest in Song Ltd for $150,000 on 1 July 2012. Profits and Dividends for Song Ltd for years ended 30 June 2018 to 2019 were as follows:
Profit before tax | Income tax expense | Dividends paid | |
2018 | $190,000 | $50,000 | $110,000 |
2019 | $180,000 | $60,000 | $22,000 |
Required:
Prepare all necessary journal entries in the records of Sam Ltd in relation to its investment in the associate, Song Ltd based on the above information. Assume there are sufficient net assets for dividend distribution and Sam Ltd does not prepare consolidated financial statements.
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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