On Jamuary 1, 2011, Papa Doc Donuts, purchased 30,000 shares of Frenchie's Beignets for $5 per share. This purchase gives Papa Doc Donuts a 7.5% stake in Frenchie's Beignets. On January 1, 2013, Papa Doc Donuts purchased an additional 90,000 shares for $6 per share gaining an additional 22.5% stake in Frenchie's Beignets. This latest purchase gave Papa Doc Donuts the ability to apply significant influence over Frenchie's Beignets. The original 7.5% investment was categorized and accounted for as an available for sale security. Frenchie's Beignets reports net income cash đividends and per share prices as follows. These amounts are assumed to have occurred evenly throughout these years. Cash dividends are declared and paid in the same period. Per Share Price Year 2011 Net Income S600,000 Cash Dividends $180,000 (December 31st Spot Rate) $6.50 2012 2013 $520,000 $480,000 $515,000 S605,000 $190,000 $145,000 $145,000 $165,000 $5.50 $7.00 $7.50 $9.00 2014 2015 On March 31, 2015, Papa Doc sells 12,000 shares of Frenchie's Beignets capital stock for $8.50 per share. ) Prepare Papa Doc Donuts December 31, 2014 journal entry(s)
On Jamuary 1, 2011, Papa Doc Donuts, purchased 30,000 shares of Frenchie's Beignets for $5 per share. This purchase gives Papa Doc Donuts a 7.5% stake in Frenchie's Beignets. On January 1, 2013, Papa Doc Donuts purchased an additional 90,000 shares for $6 per share gaining an additional 22.5% stake in Frenchie's Beignets. This latest purchase gave Papa Doc Donuts the ability to apply significant influence over Frenchie's Beignets. The original 7.5% investment was categorized and accounted for as an available for sale security. Frenchie's Beignets reports net income cash đividends and per share prices as follows. These amounts are assumed to have occurred evenly throughout these years. Cash dividends are declared and paid in the same period. Per Share Price Year 2011 Net Income S600,000 Cash Dividends $180,000 (December 31st Spot Rate) $6.50 2012 2013 $520,000 $480,000 $515,000 S605,000 $190,000 $145,000 $145,000 $165,000 $5.50 $7.00 $7.50 $9.00 2014 2015 On March 31, 2015, Papa Doc sells 12,000 shares of Frenchie's Beignets capital stock for $8.50 per share. ) Prepare Papa Doc Donuts December 31, 2014 journal entry(s)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2011, Papa Doc Domuts, purchased 30,000 shares of Frenchie's Beignets for $5 per share. This purchase
gives Papa Doc Donuts a 7.5% stake in Frenchie's Beignets. On January 1, 2013, Papa Doc Donuts purchased an
additional 90,000 shares for $6 per share gaining an additional 22.5% stake in Frenchie's Beignets. This latest purchase
gave Papa Doc Donuts the ability to apply significant influence over Frenchie's Beignets. The original 7.5% investment
was categorized and accounted for as an available for sale security.
Frenchie's Beignets reports net income cash dividends and per share prices as follows. These amounts are assumed to
have occurred evenly throughout these years. Cash dividends are declared and paid in the same period.
Per Share Price
Year
Net Income
Cash Dividends
(December 31st Spot Rate)
2011
$180,000
$600,000
$520,000
$480,000
$515,000
S605,000
$190,000
$145,000
$145,000
$165,000
$6.50
$5.50
$7.00
$7.50
$9.00
2012
2013
2014
2015
On March 31, 2015, Papa Doc sells 12,000 shares of Frenchie's Beignets capital stock for $8.50 per share.
6.) Prepare Papa Doc Donuts December 31, 2014 journal entry(s)
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