On January 1, 2023, Monty Corporation purchased 30% of the common shares of Martz Limited for $201,000. Martz shares are not traded in an active market. The carrying amount of Martz's net assets was $540,000 on that date. Any excess of the purchase cost ove Monty's share of Martz's carrying amount is attributable to unrecorded intangibles with a 20-year life. During the year, Martz earned net income and comprehensive income of $79,000 and paid dividends of $15,800. The investment in Martz had a fair value of $206,000 at December 31, 2023. During 2024, Martz incurred a net loss and comprehensive loss of $84,000 and paid no dividends. A December 31, 2024, the fair value of the investment was $145,000 and the recoverable amount was $154,000. Assume that Monty follows IFRS. (a1) Prepare all relevant journal entries related to Monty's investment in Martz for 2023 and 2024, assuming this is its only investment and Monty cannot exercise significant influence over Martz's policies. Monty accounts for this investment using the FV-NI model. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation 2023: Debit Credit
On January 1, 2023, Monty Corporation purchased 30% of the common shares of Martz Limited for $201,000. Martz shares are not traded in an active market. The carrying amount of Martz's net assets was $540,000 on that date. Any excess of the purchase cost ove Monty's share of Martz's carrying amount is attributable to unrecorded intangibles with a 20-year life. During the year, Martz earned net income and comprehensive income of $79,000 and paid dividends of $15,800. The investment in Martz had a fair value of $206,000 at December 31, 2023. During 2024, Martz incurred a net loss and comprehensive loss of $84,000 and paid no dividends. A December 31, 2024, the fair value of the investment was $145,000 and the recoverable amount was $154,000. Assume that Monty follows IFRS. (a1) Prepare all relevant journal entries related to Monty's investment in Martz for 2023 and 2024, assuming this is its only investment and Monty cannot exercise significant influence over Martz's policies. Monty accounts for this investment using the FV-NI model. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation 2023: Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject: acounting
Transcribed Image Text:On January 1, 2023, Monty Corporation purchased 30% of the common shares of Martz Limited for $201,000. Martz shares are not
traded in an active market. The carrying amount of Martz's net assets was $540,000 on that date. Any excess of the purchase cost over
Monty's share of Martz's carrying amount is attributable to unrecorded intangibles with a 20-year life. During the year, Martz earned
net income and comprehensive income of $79,000 and paid dividends of $15,800. The investment in Martz had a fair value of
$206,000 at December 31, 2023. During 2024, Martz incurred a net loss and comprehensive loss of $84,000 and paid no dividends. At
December 31, 2024, the fair value of the investment was $145,000 and the recoverable amount was $154,000. Assume that Monty
follows IFRS.
(a1)
Prepare all relevant journal entries related to Monty's investment in Martz for 2023 and 2024, assuming this is its only
investment and Monty cannot exercise significant influence over Martz's policies. Monty accounts for this investment using the
FV-NI model. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no
entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit
entries.)
Account Titles and Explanation
2023:
Debit
Credit
Transcribed Image Text:(a1)
Prepare all relevant journal entries related to Monty's investment in Martz for 2023 and 2024, assuming this is its only
investment and Monty cannot exercise significant influence over Martz's policies. Monty accounts for this investment using the
FV-NI model. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no
entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit
entries.)
Account Titles and Explanation
2023:
(To record investment purchase)
(To record receipt of dividend)
2023:
(To record investment purchase)
(To record receipt of dividend)
Show Transcribed Text
(To record fair value adjustment)
2024:
Debit
G
Credit
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