In 1975, Dominic and Cassandra Tripp started farming the land known as Hope-Hy Farm in Ashburn Ontario,
Question:
In 1975, Dominic and Cassandra Tripp started farming the land known as Hope-Hy Farm in Ashburn Ontario, growing vegetables as well as hog farming. After their two children were born, they thought they needed something else to occupy their time. On the 1980 Grey Cup weekend, Cassandra baked and sold their first pies on a small table at the end of their driveway. It was a major success! Over the years, Dominic and Cassandra have made many changes and new additions to the farm. In the last 40 years, small family farming has changed, but one thing still remains – the desire to bring the freshest products to their community. During the recent pandemic, Dominic and Cassandra offered to deliver their fresh products to their customers but were struggling with delivery capacity. On July 1, 2020, they purchased 20% of the outstanding common shares of Howard Trucking owned by Darcy Howard for $14,000. As part of the agreement with Darcy, Dominic and Cassandra agree to the following terms and conditions.
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By year-end the value of the Howard shares had increased to $18,000. Howard earned $20,000 for the year ended December 31, 2020, which is earned evenly throughout the year. Howard paid dividends twice per year on June 30th and December 31st. The December 31st dividend totaled $5,000.
Explaining how to account for the above transactions in their GAAP? Show full calculation
Fundamentals of Physics
ISBN: 978-0471758013
8th Extended edition
Authors: Jearl Walker, Halliday Resnick