Sam Ltd acquired 35 interest in Song Ltd for $150,000 on 1 July 2012 Profits and Dividends for Song Ltd for years ended 30 June 2018 to 2019 were as follows Profit before tax Income tax expense Dividends paid 2018 $190,000 $50,000 $110,000 2019 $180,000 $60,000 $22,000 Required Prepare all necessar...

July 1 2018 Dr Investment in Song Ltd 150000 Cr Cash 150000 This entry records the acquisition of th ...

Sam Ltd acquired 35% interest in Song Ltd for $150,000 on 1 July 2012. Profits and Dividends

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Question:

Sam Ltd acquired 35% interest in Song Ltd for $150,000 on 1 July 2012. Profits and Dividends for Song Ltd for years ended 30 June 2018 to 2019 were as follows:

	Profit before tax	Income tax expense	Dividends paid
2018	$190,000	$50,000	$110,000
2019	$180,000	$60,000	$22,000

Required:

Prepare all necessary journal entries in the records of Sam Ltd in relation to its investment in the associate, Song Ltd based on the above information. Assume there are sufficient net assets for dividend distribution and Sam Ltd does not prepare consolidated financial statements.