Required informationOcean Enterprises Inc. (Ocean) acquired 15% of the 100,000 outstanding common shares of Whale Ltd. (Whale) onJanuary 1, 2022, for a cash consideration of $180,000 and a further 10% of the company's common shares a yearlater for $130,000. On July 1, 2023, Ocean sold half of its holding in Whale for proceeds of $175,000Whale earned income of $150,000 in 2022 and $180,000 in 2023 (evenly over both years) and paid a regular semi-annual dividend of $40,000 on June 30th and December 31st of each year.Ocean does not have significant influence over Whale. The company's shares were trading for $13 at the end of2022 and $11.75 at the end of 2023.Assume Whale has classified the investment as fair value through profit and loss (FVTPL). Prepare dated journal entries forOcean for 2022 to account for its investment in Whale and any related income therefrom.

The entries for the fair value through profit and loss is the journal entries which are based upon…

Assume Whale has classified the investment as fair value through profit and loss (FVTPL). Prepare dated journal entries for Ocean for 2022 to account for its investment in Whale and any related income therefrom.

Assume Whale has classified the investment as fair value through profit and loss (FVTPL). Prepare dated journal entries for Ocean for 2022 to account for its investment in Whale and any related income therefrom.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Required information
Ocean Enterprises Inc. (Ocean) acquired 15% of the 100,000 outstanding common shares of Whale Ltd. (Whale) on
January 1, 2022, for a cash consideration of $180,000 and a further 10% of the company's common shares a year
later for $130,000. On July 1, 2023, Ocean sold half of its holding in Whale for proceeds of $175,000
Whale earned income of $150,000 in 2022 and $180,000 in 2023 (evenly over both years) and paid a regular semi-
annual dividend of $40,000 on June 30th and December 31st of each year.
Ocean does not have significant influence over Whale. The company's shares were trading for $13 at the end of
2022 and $11.75 at the end of 2023.
Assume Whale has classified the investment as fair value through profit and loss (FVTPL). Prepare dated journal entries for
Ocean for 2022 to account for its investment in Whale and any related income therefrom.

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