Grouper Inc. acquired 10% of the outstanding common shares of Gregson Inc. on December 31, 2019. The purchase price was $904,000 for 45,200 shares, and is equal to 10% of Gregson’s carrying amount. Gregson declared and paid a $0.80 per share cash dividend on June 15 and again on December 15, 2020. Gregson reported net income of $516,000 for 2020. The fair value of Gregson’s shares was $24 per share at December 31, 2020. Grouper is a public company and applies IFRS. Prepare the journal entries for Grouper for 2019 and 2020, assuming that Grouper cannot exercise significant influence over Gregson. The investment is accounted for using the FV-OCI model. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)DateAccount Titles and ExplanationDebitCreditchoose a transaction date Dec. 15, 2020Jun. 15, 2020Dec. 31, 2019enter an account titleenter a debit amountenter a credit amount enter an account titleenter a debit amountenter a credit amountchoose a transaction date Dec. 31, 2019Dec. 15, 2020Jun. 15, 2020enter an account titleenter a debit amountenter a credit amount enter an account titleenter a debit amountenter a credit amountchoose a transaction date Dec. 31, 2019Dec. 15, 2020Jun. 15, 2020enter an account titleenter a debit amountenter a credit amount enter an account titleenter a debit amountenter a credit amountchoose a transaction date Dec. 15, 2020Dec. 31, 2020Dec. 31, 2019enter an account titleenter a debit amountenter a credit amount enter an account titleenter a debit amountenter a credit amount Prepare the journal entries for Grouper for 2019 and 2020, assuming that Grouper can exercise significant influence over Gregson. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)DateAccount Titles and ExplanationDebitCreditchoose a transaction date Dec. 31, 2020Jun. 15, 2020Dec. 31, 2019Dec. 15, 2020enter an account titleenter a debit amountenter a credit amount enter an account titleenter a debit amountenter a credit amountchoose a transaction date Jun. 15, 2020Dec. 31, 2020Dec. 31, 2019Dec. 15, 2020enter an account titleenter a debit amountenter a credit amount enter an account titleenter a debit amountenter a credit amountchoose a transaction date Dec. 15, 2020Jun. 15, 2020Dec. 31, 2019Dec. 31, 2020enter an account titleenter a debit amountenter a credit amount enter an account titleenter a debit amountenter a credit amountchoose a transaction date Jun. 15, 2020Dec. 31, 2020Dec. 15, 2020Dec. 31, 2019enter an account title to record investment incomeenter a debit amountenter a credit amount enter an account title to record investment incomeenter a debit amountenter a credit amount (To record investment income)

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Grouper Inc. acquired 10% of the outstanding common shares of Gregson Inc. on December 31, 2019. The purchase price was $904,000 for 45,200 shares, and is equal to 10% of Gregson’s carrying amount. Gregson declared and paid a $0.80 per share cash dividend on June 15 and again on December 15, 2020. Gregson reported net income of $516,000 for 2020. The fair value of Gregson’s shares was $24 per share at December 31, 2020. Grouper is a public company and applies IFRS.

Prepare the journal entries for Grouper for 2019 and 2020, assuming that Grouper cannot exercise significant influence over Gregson. The investment is accounted for using the FV-OCI model. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
choose a transaction date Dec. 15, 2020Jun. 15, 2020Dec. 31, 2019	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date Dec. 31, 2019Dec. 15, 2020Jun. 15, 2020	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date Dec. 31, 2019Dec. 15, 2020Jun. 15, 2020	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date Dec. 15, 2020Dec. 31, 2020Dec. 31, 2019	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

Prepare the journal entries for Grouper for 2019 and 2020, assuming that Grouper can exercise significant influence over Gregson. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
choose a transaction date Dec. 31, 2020Jun. 15, 2020Dec. 31, 2019Dec. 15, 2020	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date Jun. 15, 2020Dec. 31, 2020Dec. 31, 2019Dec. 15, 2020	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date Dec. 15, 2020Jun. 15, 2020Dec. 31, 2019Dec. 31, 2020	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date Jun. 15, 2020Dec. 31, 2020Dec. 15, 2020Dec. 31, 2019	enter an account title to record investment income	enter a debit amount	enter a credit amount
	enter an account title to record investment income	enter a debit amount	enter a credit amount
	(To record investment income)

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