Reference no: EM132939154
a. On March 1, 20X0, Casey Co. acquired 1,000 shares of Hoi Co. for $40,000. This investment represents a 15% interest in Hoi. Casey has classified this investment as an FVTPL. On November 30, 20X0, Hoi paid a $35,000 dividend to its shareholders. At February 28, 20X1, Hoi's shares were valued at $40/share and Hoi reported net income of $170,000 for the year. On April 15, 20X1, Casey sold the shares for $75,000. Both Casey and Hoi have February 28th year-ends.
b. On March 1, 20X0, JBJ Co. acquired 1,000 shares of Hoi Co. for $40,000. This investment represents a 15% interest in Hoi. JBJ has classified this investment as an FVTOCI. On November 30, 20X0, Hoi paid a $35,000 dividend to its shareholders. At February 28, 20X1, Hoi's shares were valued at $40/share, and Hoi reported net income of $150,000 for the year. On April 15, 20X1, JBJ sold the shares for $75,000. Both JBJ and Hoi have February 28th year-ends.
c. On March 1, 20X0, Merk Ltd. acquired 2,000 shares of Hoi Co. for $70,000. This investment represents a 30% interest in Hoi. Merk has significant influence. On November 30, 20X0, Hoi paid a $35,000 dividend to its shareholders. At December 31, 20X0, Hoi's shares were valued at $40/share, and Hoi reported net income of $150,000 for the year. On April 15, 20X1, Merk sold the shares for $116,000. Both Merk and Hoi have February 28th year-ends.
Question 1: Prepare dated journal entries for the investment on the acquiring company's books from acquisition to disposal. Ignore income taxes.
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