PA2-3A On December 31, 2016, Ogallala Associates owned the following securities, held as a long-term investment....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
PA2-3A On December 31, 2016, Ogallala Associates owned the following securities, held as a long-term investment. The securities are not held for influence or control of the investee. Ordinary Shares Shares Cost Carlene Co. Riverdale Co. 2,000 £60,000 45,000 5,000 Raczynski Co. 1,500 30,000 On December 31, 2016, the total fair value of the securities was equal to its cost. In 2017, the following transactions occurred. Aug. 1 Received £0.70 per share cash dividend on Carlene Co. ordinary shares. Sept. 1 Sold 2,000 ordinary shares of Riverdale Co. for cash at £8 per share. Oct. 1 Sold 800 ordinary shares of Carlene Co. for cash at £33 per share. Nov. 1 Received £1 per share cash dividend on Raczynski Co. ordinary shares. Dec. 15 Received £0.70 per share cash dividend on Carlene Co, ordinary shares. 31 Received £1 per share annual cash dividend on Riverdale Co. ordinary shares. At December 31, the fair values per share of the ordinary shares were Carlene Co. £32, Riverdale Co. £8, and Raczynski Co. £18. Instructions (a) Journalize the 2017 transactions and post to the account Share Investments. (Use the T-account form.) (b) Prepare the adjusting entry at December 31, 2017, to show the securities at fair value. The shares should be classified as non-trading securities. (c) Show the statement of financial position presentation of the investments at December 31, 2017. At this date, Ogallala Associates has share capital-ordinary £1,500,000 and retained earnings £1,000,000. 12-4A Control Alt Design Ltd. acquired 30% of the outstanding ordinary shares of Walter Company on January 1, 2017, by paying £800,000 for the 45,000 shares. Walter declared and paid £0.30 per share cash dividends on March 15, June 15, September 15, and Decem- ber 15, 2017. Walter reported net income of £320,000 for the year. At December 31, 2017, the market price of Walter ordinary shares was £24 per share. Instructions (a) Prepare the journal entries for Control Alt Design for 2017, assuming Control Alt Design cannot exercise significant influence over Walter. Use the cost method and assume that Walter ordinary shares should be classified as a trading security. (b) Prepare the journal entries for Control Alt Design for 2017, assuming Control Alt Design can exercise significant influence over Walter. Use the equity method. (c) Indicate the statement of financial position and income statement account balances at December 31, 2017, under each method of accounting. PA2-3A On December 31, 2016, Ogallala Associates owned the following securities, held as a long-term investment. The securities are not held for influence or control of the investee. Ordinary Shares Shares Cost Carlene Co. Riverdale Co. 2,000 £60,000 45,000 5,000 Raczynski Co. 1,500 30,000 On December 31, 2016, the total fair value of the securities was equal to its cost. In 2017, the following transactions occurred. Aug. 1 Received £0.70 per share cash dividend on Carlene Co. ordinary shares. Sept. 1 Sold 2,000 ordinary shares of Riverdale Co. for cash at £8 per share. Oct. 1 Sold 800 ordinary shares of Carlene Co. for cash at £33 per share. Nov. 1 Received £1 per share cash dividend on Raczynski Co. ordinary shares. Dec. 15 Received £0.70 per share cash dividend on Carlene Co, ordinary shares. 31 Received £1 per share annual cash dividend on Riverdale Co. ordinary shares. At December 31, the fair values per share of the ordinary shares were Carlene Co. £32, Riverdale Co. £8, and Raczynski Co. £18. Instructions (a) Journalize the 2017 transactions and post to the account Share Investments. (Use the T-account form.) (b) Prepare the adjusting entry at December 31, 2017, to show the securities at fair value. The shares should be classified as non-trading securities. (c) Show the statement of financial position presentation of the investments at December 31, 2017. At this date, Ogallala Associates has share capital-ordinary £1,500,000 and retained earnings £1,000,000. 12-4A Control Alt Design Ltd. acquired 30% of the outstanding ordinary shares of Walter Company on January 1, 2017, by paying £800,000 for the 45,000 shares. Walter declared and paid £0.30 per share cash dividends on March 15, June 15, September 15, and Decem- ber 15, 2017. Walter reported net income of £320,000 for the year. At December 31, 2017, the market price of Walter ordinary shares was £24 per share. Instructions (a) Prepare the journal entries for Control Alt Design for 2017, assuming Control Alt Design cannot exercise significant influence over Walter. Use the cost method and assume that Walter ordinary shares should be classified as a trading security. (b) Prepare the journal entries for Control Alt Design for 2017, assuming Control Alt Design can exercise significant influence over Walter. Use the equity method. (c) Indicate the statement of financial position and income statement account balances at December 31, 2017, under each method of accounting.
Expert Answer:
Related Book For
Financial Accounting
ISBN: 978-1118978085
IFRS 3rd edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Posted Date:
Students also viewed these accounting questions
-
On December 31, 2016, Ogallala Associates owned the following securities, held as a long-term investment. The securities are not held for influence or control of the investee. Ordinary Shares Shares...
-
On December 31, 2013, Ogallala Associates owned the following securities, held as a long-term investment. The securities are not held for influence or control of the investee. On December 31, 2013,...
-
On December 31, 2012, Ogallala Associates owned the following securities, held as a long-term investment. The securities are not held for influence or control of the investee. Common Stock Shares...
-
1. Identify the function of the underlined noun/s in each item. 1. On rainy mornings, is your bus usually late? 2. On the desk were the red pencils. 3. Volcanoes and earthquakes are destructive...
-
CPF Corporation reported the following results for its first three years of operation: Description Amount 2013 Income (before income taxes). $ 80,000 2014 Loss (before income taxes)... (620,000) 2015...
-
In an online psychology experiment sponsored by the University of Mississippi, researchers asked study participants to respond to various stimuli. Participants were randomly assigned to one of three...
-
Which of the following policy objectives describes the disallowance of entertainment expenses? a. Political b. Equity c. Economic d. Social
-
FIFO method, equivalent units. Refer to the information in Exercise 17-19. Suppose the Assembly Division at Fenton Watches, Inc., uses the FIFD method of process costing instead of the...
-
Nancy and Tonya collide in the air. Tonya has a mass of 6 0 kg and a velocity of 5 m / s . Nancy has a mass of 5 0 kg and a velocity of 6 m / s . If they are traveling in opposite directions before...
-
A bank categorizes its customers into one of three groups based on their banking habits. A random sample of 30 customers from each group was selected, and the number of times each customer visited...
-
Calculate the break-even sales revenue and units for the two models of snowboards proposed. Calculate the net profit for the sales target of 10,000, 15,000 and 25,000 units of each product. Proposed...
-
Consumer wants it all: hybrid shopping, sustainability and purpose driven brands- IBM by Karl haller, Mary Wallace, Jane and sachin Read the article and answer the following question Q1. define...
-
How do government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac influence the mortgage market, and what regulatory frameworks govern their operations?
-
What are the implications of Functionalism for social policy and governance, particularly in terms of fostering social cohesion, enhancing institutional efficacy, and promoting the well-being of...
-
Find an example of collusion between firms (not discussed in class) and explain what happened. Provide the link. (2 extra points if no one else chooses the same example as you...to encourage you to...
-
Primary Source Talks 2 A. If you were to Select a primary source from the links below, which one would you read, and take notes on it? Booker T. Washington & W.E.B. DuBois on Black Progress (1895,...
-
Suppose all the elements of a valid contract have been met in the client's case, but there has been a mistake as to a material fact on the part of the would-be defendant in the case. What term...
-
Proposals have been made to ?sail? spacecraft to the outer solar system using the pressure of sunlight, or even to propel interstellar spacecraft with high-powered, Earth-based lasers. Sailing...
-
James Ltd.'s statement of fi nancial position at December 31, 2016, is presented below. During 2017, the following transactions occurred. 1. James paid £2,500 interest on the bonds on January...
-
The trial balance columns of the worksheet for Lim Company, Ltd. at June 30, 2017, are as follows (in thousands). LIM COMPANY, LTD. Worksheet For the Month Ended June 30, 2017 Other data: 1. A...
-
Sara Rankin is the assistant chief accountant at Hokey Company Ltd., a manufacturer of computer chips and cellular phones. The company presently has total sales of 20 million. It is the end of the...
-
Using two CST elements, solve the simple shear problem depicted in the figure and determine whether the CST elements can represent the simple shear condition accurately or not. Material properties...
-
A heat conduction problem is modeled using four onedimensional heat conduction elements, as shown in figure 4.6. All elements are of the same length, \(L=1 \mathrm{~m}\), cross sectional area of...
-
Consider a network of onedimensional heat conduction elements as shown in figure 4.7. The temperature at node 1 is fixed and heat inputs at other nodes are prescribed. Properties of the elements are...
Study smarter with the SolutionInn App