Earth Inc. purchased 13,500 of the common shares of Moon Inc. on January 1, Year 2 for$310,500. Moon had 90,000 common shares outstanding. During Year 2, Moon had incomeof $110,000 and paid dividends of $60,000. On December 31, Year 2 the selling price ofMoon's shares was $25 per share.Earth purchased additional 9,000 shares of Moon's common shares on March 1, Year 3 for$216,000. During Year 3, Moon had income of $120,000 earned evenly over the year. OnDecember 31, Moon declared dividends of $70,000. On December 31, Year 3 the sellingprice of Moon's shares was $21 per share.January 2, Year 4, Moon's shares price fell to $19.50 per share and the decline is consideredpermanent.Required: Prepare all the journal entries for Years 2, 3 and January 2, Year 4 related toEarth's investment in Moon.Write out ALL account names and show all calculations for full marks

A common stock appears to be a type of instrument that represents ownership of a company's equity.…

Earth Inc. purchased 13,500 of the common shares of Moon Inc. on January 1, Year 2 for $310,500. Moon had 90,000 common shares outstanding. During Year 2, Moon had income of $110,000 and paid dividends of S60,000. On December 31, Year 2 the selling price of Moon's shares was $25 per share. Earth purchased additional 9,000 shares of Moon's common shares on March 1, Year 3 for $216,000. During Year 3, Moon had income of S120,000 carned evenly over the year. On December 31, Moon declared dividends of $70,000. On December 31, Year 3 the selling price of Moon's shares was $21 per share. January 2, Year 4, Moon's shares price fell to S19.50 per share and the decline is considered permanent. Required: Prepare all the journal entries for Years 2, 3 and January 2, Year 4 related to Earth's investment in Moon. Write out ALL account names and show all calculations for full marks

Earth Inc. purchased 13,500 of the common shares of Moon Inc. on January 1, Year 2 for $310,500. Moon had 90,000 common shares outstanding. During Year 2, Moon had income of $110,000 and paid dividends of S60,000. On December 31, Year 2 the selling price of Moon's shares was $25 per share. Earth purchased additional 9,000 shares of Moon's common shares on March 1, Year 3 for $216,000. During Year 3, Moon had income of S120,000 carned evenly over the year. On December 31, Moon declared dividends of $70,000. On December 31, Year 3 the selling price of Moon's shares was $21 per share. January 2, Year 4, Moon's shares price fell to S19.50 per share and the decline is considered permanent. Required: Prepare all the journal entries for Years 2, 3 and January 2, Year 4 related to Earth's investment in Moon. Write out ALL account names and show all calculations for full marks

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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