On January 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 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 Net Income $600,000 (December 31st Spot Rate) $6.50 $5.50 $7.00 $7.50 $9.00 Year Cash Dividends 2011 2012 $180,000 $520,000 $480,000 $515,000 S605,000 $190,000 $145,000 $145,000 2013 2014 2015 $165,000 On March 31, 2015, Papa Doc sells 12,000 shares of Frenchie's Beignets capital stock for $8.50 per share. 3.) Prepare Papa Doc Donuts December 31, 2012 journal entry.
On January 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 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 Net Income $600,000 (December 31st Spot Rate) $6.50 $5.50 $7.00 $7.50 $9.00 Year Cash Dividends 2011 2012 $180,000 $520,000 $480,000 $515,000 S605,000 $190,000 $145,000 $145,000 2013 2014 2015 $165,000 On March 31, 2015, Papa Doc sells 12,000 shares of Frenchie's Beignets capital stock for $8.50 per share. 3.) Prepare Papa Doc Donuts December 31, 2012 journal entry.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
See Image
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
(December 31st Spot Rate)
$6.50
Year
Net Income
Cash Dividends
S600,000
$520,000
$480,000
$180,000
$190,000
$145,000
$145,000
2011
$5.50
$7.00
$7.50
$9.00
2012
2013
2014
$515,000
$605,000
2015
$165,000
On March 31, 2015, Papa Doc sells 12,000 shares of Frenchie's Beignets capital stock for $8.50 per share.
3.) Prepare Papa Doc Donuts December 31, 2012 journal entry.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education