Baskin purchased 24,000 common shares (15%) of Robbin on January 1, Year 5, for $293,000 and classified the investment as FVTPL. Robbin reported net income of $103,000 in Year 5 and $108,000 in Year 6, and paid dividends of $58,000 in each year. Robbin's shares were trading at $16 per share on December 31, Year 5, and January 1, Year 6. On January 1, Year 6, Baskin obtained significant influence over the operating, investing, and financing decisions of Robbin when the controlling shareholder sold some shares in the open market and lost control over Robbin. Accordingly, the investment in Robbin was reclassified to an investment in associate. On December 31, Year 6, Baskin sold its investment in Robbin for $17 per share. Required: Prepare all journal entries for Years 5 and 6 related to Baskin's investment in Robbin. Date January 1, Year 5 December 31, Year 5 Date December 31, Year 6 General Journal Investment in Robbin Cash Cash Dividend income Record dividend revenue declared and paid for Baskins Investment. December 31, Year 5 Investment in Robbin Unrealized gain on FVTPL investment Record the revaluation of Investment. General Journal (Click to select) (Click to select) Share of Robbin's income # December 31, Year 6 (Click to select) (Click to select) (Click to select) Sale of investment in Robbin # December 31, Year 6 (Click to select) (Click to select) Baskin's share of dividends declared by Robbin Debit 293000 8700 91000 Debit 16200 Credit 293000 8700 91000 Credit 16200
Baskin purchased 24,000 common shares (15%) of Robbin on January 1, Year 5, for $293,000 and classified the investment as FVTPL. Robbin reported net income of $103,000 in Year 5 and $108,000 in Year 6, and paid dividends of $58,000 in each year. Robbin's shares were trading at $16 per share on December 31, Year 5, and January 1, Year 6. On January 1, Year 6, Baskin obtained significant influence over the operating, investing, and financing decisions of Robbin when the controlling shareholder sold some shares in the open market and lost control over Robbin. Accordingly, the investment in Robbin was reclassified to an investment in associate. On December 31, Year 6, Baskin sold its investment in Robbin for $17 per share. Required: Prepare all journal entries for Years 5 and 6 related to Baskin's investment in Robbin. Date January 1, Year 5 December 31, Year 5 Date December 31, Year 6 General Journal Investment in Robbin Cash Cash Dividend income Record dividend revenue declared and paid for Baskins Investment. December 31, Year 5 Investment in Robbin Unrealized gain on FVTPL investment Record the revaluation of Investment. General Journal (Click to select) (Click to select) Share of Robbin's income # December 31, Year 6 (Click to select) (Click to select) (Click to select) Sale of investment in Robbin # December 31, Year 6 (Click to select) (Click to select) Baskin's share of dividends declared by Robbin Debit 293000 8700 91000 Debit 16200 Credit 293000 8700 91000 Credit 16200
Chapter22: S Corporations
Section: Chapter Questions
Problem 36P
Related questions
Question
Transcribed Image Text:Baskin purchased 24,000 common shares (15%) of Robbin on January 1, Year 5, for $293,000 and
classified the investment as FVTPL. Robbin reported net income of $103,000 in Year 5 and $108,000 in
Year 6, and paid dividends of $58,000 in each year. Robbin's shares were trading at $16 per share on
December 31, Year 5, and January 1, Year 6. On January 1, Year 6, Baskin obtained significant influence
over the operating, investing, and financing decisions of Robbin when the controlling shareholder sold some
shares in the open market and lost control over Robbin. Accordingly, the investment in Robbin was
reclassified to an investment in associate. On December 31, Year 6, Baskin sold its investment in Robbin
for $17 per share.
Required:
Prepare all journal entries for Years 5 and 6 related to Baskin's investment in Robbin.
Date
January 1, Year 5
December 31, Year 5
December 31, Year 5
Date
December 31, Year 6
December 31, Year 6
December 31, Year 6
General Journal
Investment in Robbin
Cash
Cash
Dividend income
Record dividend revenue declared and paid for
Baskins Investment.
Investment in Robbin
Unrealized gain on FVTPL investment
Record the revaluation of Investment.
General Journal
(Click to select)
(Click to select)
Share of Robbin's income
(Click to select)
(Click to select)
Baskin's share of dividends declared by Robbin
(Click to select)
(Click to select)
(Click to select)
Sale of investment in Robbin
Debit
293000
8700
91000
Debit
16200
Credit
293000
8700
91000
Credit
16200
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