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Tomm Tomm
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6 years ago
The DEML Corporation reported the following transactions for the year 2014:

Jan.1   Purchased 35% of the common shares of Utilities Board Corporation for $700,000.
This is a long-term investment giving DEML significant influence over the operations of Utilities Board.
Sept. 30   Received a $42,000 dividend on the Utilities Board Corporation stock.
Dec. 31   Utilities Board Corporation reported net income of $176,200 for the year ended December 31, 2014.
Dec. 31   DEML sold 50% of the Utilities Board shares for $400,000.

Prepare journal entries to record all the above events for the DEML Corporation.
Textbook 
Financial Accounting, Canadian Edition

Financial Accounting, Canadian Edition


Edition: 5th
Authors:
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ACC 925

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wrote...
#1
6 years ago
Jan. 1    Long-Term Investment   700,000
      Cash      700,000
Sept.30    Cash       42,000
      Long-Term Investment       42,000
Dec.31    Long-Term Investment    61,670
      Investment Income       61,670
      ($176,200 × 35%)
Dec.31    Cash    400,000
      Long-Term Investment      359,835
      ($700,000 - $42,000 + 61,670) × 50%
      Gain on Sale of Investment       40,165
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