Sam Ltd acquired 35% interest in Song Ltd for $150,000 on 1 July 2012. Profits and Dividends for Song Ltd for years ended 30 June 2018 to 2019 were as follows: Profit before tax Income tax expense Dividends paid 2018 $180,000 $50,000 $100,000 2019 $170,000 $60,000 $20,000 Required: Prepare all necessary journal entries in the records of Sam Ltd in relation to its investment in the associate, Song Ltd based on the above information. Assume there are sufficient net assets for dividend distribution and Sam Ltd does not prepare consolidated financial statements.
Sam Ltd acquired 35% interest in Song Ltd for $150,000 on 1 July 2012. Profits and Dividends for Song Ltd for years ended 30 June 2018 to 2019 were as follows: Profit before tax Income tax expense Dividends paid 2018 $180,000 $50,000 $100,000 2019 $170,000 $60,000 $20,000 Required: Prepare all necessary journal entries in the records of Sam Ltd in relation to its investment in the associate, Song Ltd based on the above information. Assume there are sufficient net assets for dividend distribution and Sam Ltd does not prepare consolidated financial statements.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Sam Ltd acquired 35% interest in Song Ltd for $150,000 on 1 July 2012. Profits and Dividends for Song Ltd for years ended 30 June 2018 to 2019 were as follows:
|
|
Profit before tax |
Income tax expense |
Dividends paid |
|
2018 |
$180,000 |
$50,000 |
$100,000 |
|
2019 |
$170,000 |
$60,000 |
$20,000 |
Required:
Prepare all necessary
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education