Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Chapter 9, Problem 9.1.4E
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1. On January 3, 2020, Castle Corporation purchased the following equity securities as an investment:
Number of
Cost of
Total
Company
Shares
Share
$20
Cost
$ 8,000
24,000
600 ,7ב
400
2,000
800
B
12
22
These securities are classified as available for sale.
Required:
a. Prepare the journal entry to record the acquisition of the stock.
b. On June 30, 2020, C Company paid dividends of $3.00 per share. Prepare the journal
entry that would be used by Castle to record the dividend receipt.
c. On December 31, 2020, the market values per share were:
Company
Market Value
A
$22
B
12
20
Prepare any journal entry or entries necessary to record these changes in market value.
d. On March 14, 2021, Castle sold 800 shares of C Company for $18 per share. Prepare
the journal entry to record the sale.
Pedantic Co. purchased 20,000 shares on 1 July 20x0, making the election to use the
alternative treatment under FVTOCI – IFRS 9. Given that each share costs $3.50. Transaction
costs of the purchase were $400.
At 31 December 20x0, the shares are trading at $5.0 each.
a. What is the carrying balance of this financial asset shown on statement of financial position
as at 31 December 20X0?
b. What is the gain to be recognised on these shares for the year ended 31 December 20X0?
Where to record this gain in statement of profit or loss and other comprehensive?
c. Assume that these shares were held for sales, what is the initial measurement of this
financial asset at 01 July 20x0? What should Pedantic Co record in statement of profit or
loss and other comprehensive income at the year ended 20X0?
On May 1, 20x1, Damage, Inc. declared cash dividends of P20 per share to shareholders of record on May 15, 20x1, for distribution on May 31, 20x1. Hetfield Co. purchases 20,000 Damage, Inc. shares for P200 per share and classifies the shares as investment in FVOCI securities.
Requirements: Provide all the entries in May 20x1 under each of the following scenarios:
a. Hetfield purchased the shares on May 5, 20x1.
b. Hetfield purchased the shares on May 21, 20x1.
Chapter 9 Solutions
Advanced Financial Accounting
Ch. 9 - Prob. 9.1QCh. 9 - Prob. 9.2QCh. 9 - Prob. 9.3QCh. 9 - Prob. 9.4QCh. 9 - Prob. 9.5QCh. 9 - Prob. 9.6QCh. 9 - Prob. 9.7QCh. 9 - Prob. 9.8QCh. 9 - Prob. 9.9QCh. 9 - Prob. 9.10Q
Ch. 9 - Prob. 9.11QCh. 9 - Prob. 9.12QCh. 9 - Prob. 9.13QCh. 9 - Prob. 9.14QCh. 9 - Prob. 9.15QCh. 9 - Prob. 9.16QCh. 9 - Prob. 9.1CCh. 9 - Prob. 9.2CCh. 9 - Prob. 9.3CCh. 9 - Prob. 9.4CCh. 9 - Prob. 9.5CCh. 9 - Prob. 9.1.1ECh. 9 - Prob. 9.1.2ECh. 9 - Prob. 9.1.3ECh. 9 - Prob. 9.1.4ECh. 9 - Prob. 9.2.1ECh. 9 - Prob. 9.2.2ECh. 9 - Prob. 9.2.3ECh. 9 - Prob. 9.2.4ECh. 9 - Prob. 9.2.5ECh. 9 - Prob. 9.3ECh. 9 - Prob. 9.4ECh. 9 - Prob. 9.5ECh. 9 - Prob. 9.6ECh. 9 - Prob. 9.7ECh. 9 - Prob. 9.8ECh. 9 - Prob. 9.9ECh. 9 - Prob. 9.10ECh. 9 - Prob. 9.11ECh. 9 - Subsidiary Stock Dividend Stake Company reported...Ch. 9 - Prob. 9.13ECh. 9 - Prob. 9.14ECh. 9 - Prob. 9.15ECh. 9 - Prob. 9.16ECh. 9 - Prob. 9.17.1PCh. 9 - Prob. 9.17.2PCh. 9 - Prob. 9.17.3PCh. 9 - Prob. 9.17.4PCh. 9 - Prob. 9.17.5PCh. 9 - Prob. 9.18PCh. 9 - Prob. 9.19PCh. 9 - Prob. 9.20PCh. 9 - Prob. 9.21PCh. 9 - Prob. 9.22PCh. 9 - Prob. 9.23PCh. 9 - Prob. 9.24PCh. 9 - Prob. 9.25PCh. 9 - Prob. 9.26PCh. 9 - Prob. 9.27P
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