Peone, Inc. purchased 15% of Rhodo Corporation's 100,000 outstanding common shares at a cost of $30...

 

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Peone, Inc. purchased 15% of Rhodo Corporation's 100,000 outstanding common shares at a cost of $30 per share on January 3, 2020. The purchase price of $30 per share was based solely on the book value of Rhodo's net assets. On September 21. Rhodo declared and paid a total cash dividend of $210,000. On December 31, Peone's year end, Rhodo reported net income of $360,000 for the year. Rhodo shares had a fair value of $32 per share at December 31. Peone, Inc, a private Canadian corporation, applies ASPE. Instructions 5.1 Under the assumption that the 20% holding of Rhodo does not give Peone significant influence over Rhodo, identify the two possible accounting methods Peone could use under ASPE to account for its investment. 1. 2. 5.2 Choose one of the acceptable methods and prepare all required 2020 journal entries under this method. Method: 5.3 Under the assumption that the 20% holding of Rhodo gives Peone sigalficant influence over Rhodo, prepare all required 2020 journal entries, assuming Peone uses the equity method of accounting. ED STATES Peone, Inc. purchased 15% of Rhodo Corporation's 100,000 outstanding common shares at a cost of $30 per share on January 3, 2020. The purchase price of $30 per share was based solely on the book value of Rhodo's net assets. On September 21. Rhodo declared and paid a total cash dividend of $210,000. On December 31, Peone's year end, Rhodo reported net income of $360,000 for the year. Rhodo shares had a fair value of $32 per share at December 31. Peone, Inc, a private Canadian corporation, applies ASPE. Instructions 5.1 Under the assumption that the 20% holding of Rhodo does not give Peone significant influence over Rhodo, identify the two possible accounting methods Peone could use under ASPE to account for its investment. 1. 2. 5.2 Choose one of the acceptable methods and prepare all required 2020 journal entries under this method. Method: 5.3 Under the assumption that the 20% holding of Rhodo gives Peone sigalficant influence over Rhodo, prepare all required 2020 journal entries, assuming Peone uses the equity method of accounting. ED STATES

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A Purchased 600 shares of the 100000 shares outstanding 10 par common shares of Dankin Corporation f... View the full answer