On 30 April 20X2, Marc Company purchased 4,800 shares of Spencer Ltd. for $29 per share plus $480 in commission. In 20X2, thecompany received a $0.80 per share dividend, and the shares had a fair value of $24 per share at the end of the year. In 20X3, thedividend was $1.60 per share, and the fair value was $33 per share at the end of the year. In 20X4, the shares were sold for $32 pershare less a $600 commission.Required:1. Show the amounts and accounts that would be reported in earnings and the statement of financial position for 20X2, 20X3, and20X4 if the company uses the: (Negative amounts should be indicated by minus sign.)a. Cost method.EarningsDividend revenueFees and commissionsGain on saleStatement of financialpositionInvestmentOCI: Holding gain/(loss)SS$20x220X33,849$ 7,6800$0 S000$ 139,680 $ 139,680$0$S$20X40014,520 X00 b. FVTPL method.EarningsDividend revenueFees and commissionsHolding gains (losses)Statement of financialpositionInvestmentOCI: Holding gain/(loss)EarningsDividend revenueFees and commissionsHolding gains (losses)Statement of financialpositionInvestmentOCI: Holding gain/(loss)Transfer to Retained20X2$ 3,840 $0X $Earnings(24,480) X$ 115,200 $ 158,4000 $$20X23,840 $$0020X3c. FVOCI-Equity method; realized amounts are transferred to retained earnings.$ 115,200(24,480)7,680043,200020X37,68000$ 158,40043,2000 $0$$$$20X4004,200 X20X40014,52018,72018,720"Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.

1. Introduction: a. Under Cost method, Investments will be intially measured and recorded at…

On 30 April 20X2, Marc Company purchased 4,800 shares of Spencer Ltd. for $29 per share plus $480 in commission. In 20X2, the company received a $0.80 per share dividend, and the shares had a fair value of $24 per share at the end of the year. In 20X3, the dividend was $1.60 per share, and the fair value was $33 per share at the end of the year. In 20X4, the shares were sold for $32 per share less a $600 commission. Required: 1. Show the amounts and accounts that would be reported in earnings and the statement of financial position for 20X2, 20X3, and 20X4 if the company uses the: (Negative amounts should be indicated by minus sign.)

On 30 April 20X2, Marc Company purchased 4,800 shares of Spencer Ltd. for $29 per share plus $480 in commission. In 20X2, the company received a $0.80 per share dividend, and the shares had a fair value of $24 per share at the end of the year. In 20X3, the dividend was $1.60 per share, and the fair value was $33 per share at the end of the year. In 20X4, the shares were sold for $32 per share less a $600 commission. Required: 1. Show the amounts and accounts that would be reported in earnings and the statement of financial position for 20X2, 20X3, and 20X4 if the company uses the: (Negative amounts should be indicated by minus sign.)

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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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

On 30 April 20X2, Marc Company purchased 4,800 shares of Spencer Ltd. for $29 per share plus $480 in commission. In 20X2, the
company received a $0.80 per share dividend, and the shares had a fair value of $24 per share at the end of the year. In 20X3, the
dividend was $1.60 per share, and the fair value was $33 per share at the end of the year. In 20X4, the shares were sold for $32 per
share less a $600 commission.
Required:
1. Show the amounts and accounts that would be reported in earnings and the statement of financial position for 20X2, 20X3, and
20X4 if the company uses the: (Negative amounts should be indicated by minus sign.)
a. Cost method.
Earnings
Dividend revenue
Fees and commissions
Gain on sale
Statement of financial
position
Investment
OCI: Holding gain/(loss)
S
S
$
20x2
20X3
3,849
$ 7,680
0
$
0 S
0
0
0
$ 139,680 $ 139,680
$
0
$
S
$
20X4
0
0
14,520 X
0
0

b. FVTPL method.
Earnings
Dividend revenue
Fees and commissions
Holding gains (losses)
Statement of financial
position
Investment
OCI: Holding gain/(loss)
Earnings
Dividend revenue
Fees and commissions
Holding gains (losses)
Statement of financial
position
Investment
OCI: Holding gain/(loss)
Transfer to Retained
20X2
$ 3,840 $
0X $
Earnings
(24,480) X
$ 115,200 $ 158,400
0 $
$
20X2
3,840 $
$
0
0
20X3
c. FVOCI-Equity method; realized amounts are transferred to retained earnings.
$ 115,200
(24,480)
7,680
0
43,200
0
20X3
7,680
0
0
$ 158,400
43,200
0 $
0
$
$
$
$
20X4
0
0
4,200 X
20X4
0
0
14,520
18,720
18,720
"Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.

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