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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![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
Cash Dividends
$180,000
(December 31st Spot Rate)
$6.50
Year
Net Income
2011
S600,000
$190,000
$145,000
$145,000
$165,000
$5.50
$7.00
$7.50
$9.00
2012
$520,000
$480,000
$515,000
$605,000
2013
2014
2015
On 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 of
22.5% of Frenchie's Beignets capital stock. {Hint-Something changes at this point, you should have more than one
joumal entry}](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0eebff4d-3f7f-4bad-9401-b87ebc980577%2Fa3404b37-b503-44e1-ad21-89208d544926%2Foqzoodb_processed.png&w=3840&q=75)
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 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
Cash Dividends
$180,000
(December 31st Spot Rate)
$6.50
Year
Net Income
2011
S600,000
$190,000
$145,000
$145,000
$165,000
$5.50
$7.00
$7.50
$9.00
2012
$520,000
$480,000
$515,000
$605,000
2013
2014
2015
On 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 of
22.5% of Frenchie's Beignets capital stock. {Hint-Something changes at this point, you should have more than one
joumal entry}
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