Question: please answer fully for upvote thank you. QUESTION 1 (13 MARKS) RST purchased 20,000 common shares (20%) of Stamp Inc. on January 1, Year 5

please answer fully for upvote thank you. please answer fully for upvote thank you. QUESTION 1 (13 MARKS) RST
purchased 20,000 common shares (20%) of Stamp Inc. on January 1, Year

QUESTION 1 (13 MARKS) RST purchased 20,000 common shares (20%) of Stamp Inc. on January 1, Year 5 for $270,000 and classified the investment as FVTPL. Stamp reported net income of $170,000 in Year 5 and $180,000 in Year 6 (earned evenly throughout the year), and paid total dividends of $20,000 each August. Stamp's shares were trading at $16 per share on December 31, Year 5, $18 per share on December 31, Year 6. On Jan 1, Year 6, RST obtained significant influence over the operating, investing, and financing decisions of Stamp when the controlling shareholder sold some shares in the open market and lost control over Stamp. Accordingly, the investment in Stamp was reclassified to an investment in associate. On December, Year 6, RST sold its full investment in Stamp REQUIRED: Provide journal entries for RST Corporation for all transactions relating to its investment in Stamp Company for Years 5 and 6. RST purchased 20,000 common shares (20%) of Stamp Inc. on January 1, Year 5 for $270,000 and classified the investment as FVTPL. Stamp reported net income of $170,000 in Year 5 and $180,000 in Year 6 (earned evenly throughout the year), and paid total dividends of $20,000 each August. Stamp's shares were trading at $16 per share on December 31, Year 5, $18 per share on December 31, Year 6. On Jan 1. Year 6, RST obtained significant influence over the operating, investing, and financing decisions of Stamp when the controlling shareholder sold some shares in the open market and lost control over Stamp. Accordingly, the investment in Stamp was reclassified to an investment in associate. On December, Year 6, RST sold its full investment in Stamp. REQUIRED: Provide journal entries for RST Corporation for all transactions relating to its investment in Stamp Company for Years 5 and 6

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!