On Jamuary 1, 2011, Papa Doc Donuts, purchased 30,000 shares of Frenchie's Beignets for $5 per share. This purchasegives Papa Doc Donuts a 7.5% stake in Frenchie's Beignets. On January 1, 2013, Papa Doc Donuts purchased anadditional 90,000 shares for $6 per share gaining an additional 22.5% stake in Frenchie's Beignets. This latest purchasegave Papa Doc Donuts the ability to apply significant influence over Frenchie's Beignets. The original 7.5% investmentwas 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 tohave occurred evenly throughout these years. Cash dividends are declared and paid in the same period.Per Share PriceCash Dividends$180,000(December 31st Spot Rate)$6.50YearNet Income2011S600,000$190,000$145,000$145,000$165,000$5.50$7.00$7.50$9.002012$520,000$480,000$515,000$605,000201320142015On March 31, 2015, Papa Doc sells 12,000 shares of Frenchie's Beignets capital stock for $8.50 per share.4.) Prepare the necessary journal entry(s) Papa Doc Donuts would need to account for the January 1, 2013 acquisition of22.5% of Frenchie's Beignets capital stock. {Hint-Something changes at this point, you should have more than onejoumal entry}

On January 1, 2011, Papa Doc Donuts, purchased 30,000 shares of Frenchie's Beignets gives Papa Doc Donuts a 7.5% stake in Frenchie's Beignets. On January 1, 2013, Papa D additional 90,000 shares for $6 per share gaining an additional 22.5% stake in Frenchies gave Papa Doc Donuts the ability to apply significant influence over Frenchie's Beignets 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. T have occurred evenly throughout these years. Cash dividends are declared and paid in th

On January 1, 2011, Papa Doc Donuts, purchased 30,000 shares of Frenchie's Beignets gives Papa Doc Donuts a 7.5% stake in Frenchie's Beignets. On January 1, 2013, Papa D additional 90,000 shares for $6 per share gaining an additional 22.5% stake in Frenchies gave Papa Doc Donuts the ability to apply significant influence over Frenchie's Beignets 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. T have occurred evenly throughout these years. Cash dividends are declared and paid in th

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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