Batman Corporation currently holds 28% of the shares of Joker Corporation as a long-term investment. The carrying value at the start of the year was $17,200,000. The following investment transactions took place in 2020. Mar 5 Purchased additional shares of Joker at a cost of $1,500,000. Brokerage commissions on the purchase were $33,000. Batman now holds 38% of the shares of Joker Corporation. Aug 17 Joker declared and distributed a total of $447,368 in dividends. Dec 31 Received the annual report from Joker, and their total net income for the year was $7,120,000. Required a) Record the transactions in the general journal. b) Post the entries into a T-account for Long-term Investment – Joker, clearly showing the opening balance and the ending balance as at Dec 31, 2020.
Batman Corporation currently holds 28% of the shares of Joker Corporation as a long-term investment. The carrying value at the start of the year was $17,200,000. The following investment transactions took place in 2020. Mar 5 Purchased additional shares of Joker at a cost of $1,500,000. Brokerage commissions on the purchase were $33,000. Batman now holds 38% of the shares of Joker Corporation. Aug 17 Joker declared and distributed a total of $447,368 in dividends. Dec 31 Received the annual report from Joker, and their total net income for the year was $7,120,000. Required a) Record the transactions in the general journal. b) Post the entries into a T-account for Long-term Investment – Joker, clearly showing the opening balance and the ending balance as at Dec 31, 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Batman Corporation currently holds 28% of the shares of Joker Corporation as a long-term investment. The carrying value at the start of the year was $17,200,000. The following investment transactions took place in 2020.
Mar 5 Purchased additional shares of Joker at a cost of $1,500,000. Brokerage commissions on the purchase were $33,000. Batman now holds 38% of the shares of Joker Corporation.
Aug 17 Joker declared and distributed a total of $447,368 in dividends.
Dec 31 Received the annual report from Joker, and their total net income for the year was $7,120,000.
Required
- a) Record the transactions in the general journal.
- b)
Post the entries into a T-account for Long-term Investment – Joker, clearly showing the opening balance and the ending balance as at Dec 31, 2020.
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