Far East Limited purchased 40% interest in ordinary shares of Blackburn company for $350,000 on 1...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Far East Limited purchased 40% interest in ordinary shares of Blackburn company for $350,000 on 1 January 2020. For the year ended December 31, 2020, Blackburn reported net profit after tax of $105,000. During the year, Blackburn paid cash dividends of $45,000. It is presumed that Far East Limited have significant influence over Blackburn company. On January 1, 2021, Far East Limited disposed all the shares of Blackburn for cash $400,000. Required: i. For the financial statements of Far East Limited for December 31, 2020, show and illustrate the total investment in Blackburn under equity accounting. (7 marks) ii. Prepare accounting entries for the disposal of Blackburn on January 1, 2021 and make the necessary equity accounting adjustments for the consolidated financial statements. (3 marks) Far East Limited purchased 40% interest in ordinary shares of Blackburn company for $350,000 on 1 January 2020. For the year ended December 31, 2020, Blackburn reported net profit after tax of $105,000. During the year, Blackburn paid cash dividends of $45,000. It is presumed that Far East Limited have significant influence over Blackburn company. On January 1, 2021, Far East Limited disposed all the shares of Blackburn for cash $400,000. Required: i. For the financial statements of Far East Limited for December 31, 2020, show and illustrate the total investment in Blackburn under equity accounting. (7 marks) ii. Prepare accounting entries for the disposal of Blackburn on January 1, 2021 and make the necessary equity accounting adjustments for the consolidated financial statements. (3 marks)
Expert Answer:
Answer rating: 100% (QA)
Ii Coet ef hwestmeet in Blackboum caupany 4 Cort mvestmeeit of pro... View the full answer
Related Book For
Managerial Accounting Tools for Business Decision Making
ISBN: 9781119403999
5th Canadian edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
Posted Date:
Students also viewed these accounting questions
-
Question 1 1. With the aid of a suitable supporting diagram, outline the purpose and key components of a Decision Support System (DSS). 2. With reference to the diagram you provided in your answer to...
-
The following facts pertain to the year ended December 31, 2014, of Grosse Pointe Corporation, a manufacturer of power tools. 1. Based on year-to-date sales through early December, management...
-
In the year ended December 31 2017 Hexham Inc Hexham reported net income of 5 100 000 which included a writeoff of 1 377 000 of company assets During 2017 accounts receivable increased by 137 700...
-
You are a lead auditor from ABC Auditors Pty Ltd. Your client is Cassey's Quality Cars Ltd who are a large car dealership with branches across Queensland. ABC Auditors have performed audits for past...
-
Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows: Required: 1. Calculate Lobster Traps break-even sales...
-
Grainger Company produces only one product and sells that product for $100 per unit. Cost information for the product is: Selling expenses are $4 per unit and are all variable. Administrative...
-
Determine the resultant internal loading on the cross section through point C of the pliers. There is a pin at A, and the jaws at B are smooth. 20 N -120 mm- 40 mm 15 mm- 80 mm 30 20 N B
-
Food Express is a well-established grocery chain. Computer Power is an up-and-coming computer software developer for business. Bridge Steel is an integrated steel producer, focusing on steel for...
-
As a foreign exchange trader at a leading bank in Kenya, you have a customer who would like spot and 30-day forward AS/Yen quotes. Current market rates are: S/KES AS/KES Spot 150.25-34 30-day 30-15...
-
For the case The WM. Wrigley Jr. Company: Capital Structure, Valuation, and the Cost of Capital(Darden Case: UVAF1482) please answer the following questions and explain your reasoningwhere...
-
If a firm has a capital structure of $37m and $10m preferred stock, how much common stock much it have if the total capital structure consists of $124m of securities?
-
Elvira is a self-employed taxpayer who turns 42 years old at the end of the year (2019). In 2019, her net Schedule C income was $130,000. This was her only source of income. This year, Elvira is...
-
Ian retired in June 2018 at the age of 69 (he turned 70 in August 2018). Ians retirement account was valued at $490,000 at the end of 2017 and $500,000 at the end of 2018. He has had all of his...
-
Alex is 31 years old and has lived in Los Alamos, New Mexico, for the last four years where he works at the Los Alamos National Laboratory (LANL). LANL provides employees with a 401(k) plan and for...
-
If your company has used metrics and tools to monitor sustainable performance, were the results ever reported to shareholders or external stakeholders?
-
Gerry (age 56) and Elaine (age 54) have been married for 12 years and file a joint tax return. The couple lives in an apartment in downtown Manhattan. Gerrys father, Mortey, recently retired from Del...
-
Read each argument. Then, for each sentence in italics, answer the following questions: Does the claim function in the argument as an unsupported premise, as a supported premise, as the conclusion of...
-
For the following exercises, write the first four terms of the sequence. a n = 2 n 2
-
For the year ended December 31, 2020, the job cost sheets of DeVoe Company contained the following data: Prepare entries in a job-order cost system and a partial income statement. Other data: 1. Raw...
-
Todd Motor Company manufactures automobiles. During September 2020, the company purchased 5,000 headlights at a cost of $8 per lights. There was no beginning inventory of lights. Todd withdrew 4,650...
-
Mega Company is considering the purchase of a new machine. The invoice price of the machine is $75,000, freight charges are estimated to be $4,000, and installation costs are expected to be $6,000....
-
Explain any four types of statistical analysis and their underlying statistical concepts. Describe how each of them has a unique role in the data analysis process.
-
Located in Tokyo, Japan, Sony Mobile Communications is a prominent competitor in the worldwide electronics equipment market. Because of stagnant sales in its ultra HD TVs, that division has decided...
-
Cory Rogers of CMG Research was happy to call Nick Thomas to inform him that Auto Concepts survey data were collected and ready for analysis. Of course, Cory had other marketing research projects and...
Study smarter with the SolutionInn App