On January 1, 2023, Pearl Corporation acquired another 2,000,000 common shares of Sapphire Company for $3.50...
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On January 1, 2023, Pearl Corporation acquired another 2,000,000 common shares of Sapphire Company for $3.50 per share. The book values of Sapphire's net assets were equal to fair values except for specialized equipment, which was now understated by $42,000 and had an estimated remaining useful life of 10 years. During 2023, Sapphire Company reported a net income of $210,000 and paid dividends of $16,000. At December 31, 2023, the fair value of Sapphire's shares was $3.80 per share. REQUIRED: c) Prepare the journal entries on the books of Pearl Corporation for the investment in Sapphire for the 2023 fiscal year. (6 Marks) On January 1, 2023, Pearl Corporation acquired another 2,000,000 common shares of Sapphire Company for $3.50 per share. The book values of Sapphire's net assets were equal to fair values except for specialized equipment, which was now understated by $42,000 and had an estimated remaining useful life of 10 years. During 2023, Sapphire Company reported a net income of $210,000 and paid dividends of $16,000. At December 31, 2023, the fair value of Sapphire's shares was $3.80 per share. REQUIRED: c) Prepare the journal entries on the books of Pearl Corporation for the investment in Sapphire for the 2023 fiscal year. (6 Marks)
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Answer January 1 2023 Investment in Sapphire Company common shares Dr 2000000 Cr 2000000 To record the acquisition of 2000000 common shares of Sapphire Company for 350 per share December 31 2023 Inves... View the full answer
Related Book For
Intermediate Accounting IFRS
ISBN: 9781119607519
4th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
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