Hanuman Corp is a medium-sized corporation that has long dominated their market. With a strong cash-flow position, they have decided to invest excess cash strategically. In particular, Hanuman made periodic investments with their main supplier, Shiva. Although Hanuman currently owns 18% of the common shares of Shiva, it does have significant influence over the operations of this investee company. Hanuman Corp has a December 31st year end. Before 2020, Hanuman had invested $22.4 million in Shiva and, at December 31, 2019, the investment had a fair value of $21.3 million. Hanuman did not sell or purchase any Shiva shares this year. Hanuman declared and paid a dividend totalling $2.2 million on all its common shares and reported 2020 net income of $13.6 million. Hanuman’s 18% ownership of Shiva has a December 31, 2020, fair value of $21,405,000. Required: Prepare the appropriate entries for the Shiva investment, for 2020
Hanuman Corp is a medium-sized corporation that has long dominated their market. With a strong cash-flow position, they have decided to invest excess cash strategically. In particular, Hanuman made periodic investments with their main supplier, Shiva. Although Hanuman currently owns 18% of the common shares of Shiva, it does have significant influence over the operations of this investee company. Hanuman Corp has a December 31st year end.
Before 2020, Hanuman had invested $22.4 million in Shiva and, at December 31, 2019, the investment had a fair value of $21.3 million. Hanuman did not sell or purchase any Shiva shares this year. Hanuman declared and paid a dividend totalling $2.2 million on all its common shares and reported 2020 net income of $13.6 million. Hanuman’s 18% ownership of Shiva has a December 31, 2020, fair value of $21,405,000.
Required: Prepare the appropriate entries for the Shiva investment, for 2020
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