Maganda Company had the following transactions for 20x5: a. On January 1, 20x5 Maganda Company purchased 1,500 shares (10% interest in voting shares) of Beautiful Company at P 100 per share plus transaction cost of P 5,000. b. At year end, the Beautiful Company’s ordinary shares had a fair value of P 125 per share. c. In March 20x6, Beautiful Company distributed a 20% stock dividends and subsequently gave P 1.00 dividend per share. d. In November 20x6, the investee corporation declared a 2 for 1 split . e. In December 20x6 Maganda Company sold 500 shares at P65 per share f. At year end of December 20x6, the Beautiful Company’s ordinary shares had a fair value of P 75 per share. Use the data above but assume that 4,500 shares were purchased on January 1, 20x5 giving Maganda Company a 30% interest in Beautiful Company. Required: Prepare Journal Entries for each of the transactions above and compute for the balance of the Equity Investment that shall be reported in the Statement of Financial Position? How much shall be reported to the Profit and Loss Statement as a result of the transactions above.
Maganda Company had the following transactions for 20x5: a. On January 1, 20x5 Maganda Company purchased 1,500 shares (10% interest in voting shares) of Beautiful Company at P 100 per share plus transaction cost of P 5,000. b. At year end, the Beautiful Company’s ordinary shares had a fair value of P 125 per share. c. In March 20x6, Beautiful Company distributed a 20% stock dividends and subsequently gave P 1.00 dividend per share. d. In November 20x6, the investee corporation declared a 2 for 1 split . e. In December 20x6 Maganda Company sold 500 shares at P65 per share f. At year end of December 20x6, the Beautiful Company’s ordinary shares had a fair value of P 75 per share. Use the data above but assume that 4,500 shares were purchased on January 1, 20x5 giving Maganda Company a 30% interest in Beautiful Company. Required: Prepare Journal Entries for each of the transactions above and compute for the balance of the Equity Investment that shall be reported in the Statement of Financial Position? How much shall be reported to the Profit and Loss Statement as a result of the transactions above.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter15: Contributed Capital
Section: Chapter Questions
Problem 1MC
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Maganda Company had the following transactions for 20x5:
a. On January 1, 20x5 Maganda Company purchased 1,500 shares (10% interest in voting shares) of Beautiful Company at P 100 per share plus transaction cost of P 5,000.
b. At year end, the Beautiful Company’s ordinary shares had a fair value of P 125 per share.
c. In March 20x6, Beautiful Company distributed a 20% stock dividends and subsequently gave P 1.00 dividend per share.
d. In November 20x6, the investee corporation declared a 2 for 1 split .
e. In December 20x6 Maganda Company sold 500 shares at P65 per share
f. At year end of December 20x6, the Beautiful Company’s ordinary shares had a fair value of P 75 per share.
Use the data above but assume that 4,500 shares were purchased on January 1, 20x5 giving Maganda Company a 30% interest in Beautiful Company.
Required: Prepare
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