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 Year 2011 Cash Dividends $180,000 (December 31st Spot Rate) $6.50 Net Income S600,000 2012 $520,000 $480,000 $190,000 $5.50 2013 $145,000 $7.00
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 Year 2011 Cash Dividends $180,000 (December 31st Spot Rate) $6.50 Net Income S600,000 2012 $520,000 $480,000 $190,000 $5.50 2013 $145,000 $7.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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 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
S600,000
$520,000
$480,000
$515,000
S605,000
Cash Dividends
$180,000
Year
(December 31st Spot Rate)
$6.50
$5.50
$7.00
$7.50
2011
$190,000
$145,000
2012
2013
2014
$145,000
$165,000
2015
$9.00
On March 31, 2015, Papa Doc sells 12,000 shares of Frenchie's Beignets capital stock for $8.50 per share.
2.) Prepare Papa Doc Donuts December 31, 2011 journal entry.
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