Q 6 – Presented below are two independent situations. (1). Faisal Cosmetics acquired 10% of the 200,000 shares of common stock of Tahir Fashion at a total cost of $14 per share on March 18, 2021. On June 30, Tahir declared and paid a $50,000 dividend. On December 31, Tahir reported net income of $122,000 for the year. At December 31, the market price of Tahir Fashion was $15 per share. The stock is classified as available-for-sale. (2). Zaid, Inc., obtained significant influence over Masud Corporation by buying 25% of Masud's 30,000 outstanding shares of common stock at a total cost of $9 per share on January 1, 2021. On June 15, Masud declared and paid a cash dividend of $30,000. On December 31, Masud reported a net income of $80,000 for the year. Instructions Prepare all the necessary journal entries for 2021 for (a). Faisal Cosmetics and (b). Zaid, Inc.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question
Q 6 – Presented below are two independent situations.
(1). Faisal Cosmetics acquired 10% of the 200,000 shares of common stock of Tahir
Fashion at a total cost of $14 per share on March 18, 2021. On June 30, Tahir declared
and paid a $50,000 dividend. On December 31, Tahir reported net income of
$122,000 for the year. At December 31, the market price of Tahir Fashion was $15
per share. The stock is classified as available-for-sale.
(2). Zaid, Inc., obtained significant influence over Masud Corporation by buying 25% of
Masud's 30,000 outstanding shares of common stock at a total cost of $9 per share
on January 1, 2021. On June 15, Masud declared and paid a cash dividend of $30,000.
On December 31, Masud reported a net income of $80,000 for the year.
Instructions
Prepare all the necessary journal entries for 2021 for
(a). Faisal Cosmetics and
(b). Zaid, Inc.
Transcribed Image Text:Q 6 – Presented below are two independent situations. (1). Faisal Cosmetics acquired 10% of the 200,000 shares of common stock of Tahir Fashion at a total cost of $14 per share on March 18, 2021. On June 30, Tahir declared and paid a $50,000 dividend. On December 31, Tahir reported net income of $122,000 for the year. At December 31, the market price of Tahir Fashion was $15 per share. The stock is classified as available-for-sale. (2). Zaid, Inc., obtained significant influence over Masud Corporation by buying 25% of Masud's 30,000 outstanding shares of common stock at a total cost of $9 per share on January 1, 2021. On June 15, Masud declared and paid a cash dividend of $30,000. On December 31, Masud reported a net income of $80,000 for the year. Instructions Prepare all the necessary journal entries for 2021 for (a). Faisal Cosmetics and (b). Zaid, Inc.
Expert Solution
steps

Step by step

Solved in 2 steps with 4 images

Blurred answer
Knowledge Booster
Financial Statements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education