What is the amount of investmentin associate should Minjin reportin its statement of financialposition? On January 5, 2019, Minjin Company acquired30% of the ordinary shares that carry voting rightsat a general meeting of shareholders of HarisaCompany for P300,000. For the year endedDecember 31, 2019, Harisa recognized net incomeof P400,000.On January 6, 2019, Harisa declared a dividend ofP100,000 for the year 2018. On December 31,2019, Harisa declared and paid a dividend ofP150,000 for the year 2019. At December 31, 2019,the fair value of Minjin's investment in Harisa isP400,000.

Investment is defined as an act by which a person who owns the money or has surplus funds available,…

Answered: On January 5, 2019, Minjin Company…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 14RE

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On January 1, 2020, Red Company purchased 80% of the common stock of Al-Yasa Company by issuing 10,000 shares of its (AI-Maha) OMR15 par value common stock with a market price of OMR25 per share. Al-Naba incurred cash expenses of OMR 8,000 for registering and issuing the common stock. The stockholders' equity sections of the two companies' balance sheets on December 31, 2019, were: Al-Yasa Al-Maha Common Stock, OMR15 par value OMR 350,000 OMR240,000 Other Contributed Capital 590,000 80,000 Retained Earnings 380,000 130,000 Required: A. Prepare the journal entry(s) on the books of Al- Maha Company to record the purchase of the common stock of Moon Company and related expenses. B. Prepare the elimination entry(s) required for the preparation of a consolidated balance sheet work paper on the date of acquisition.
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