Reference no: EM132604374
Chloe Corporation ("Chloe") is considering making a significant long-term investment in Atom Ltd. ("Atom"), a young and very promising company. Chloe decides to make a smaller investment first, and if Atom turns out to be successful, Chloe intends to make an additional investment to reach significant influence. Atom has 200,000 shares authorized, and 100,000 shares outstanding.
On January 1, 2020, Atom sold 10,000 of its own shares to Chloe for $ 400,000 in cash.
Additional information:
1. On November 1, 2020, Atom declares a total cash dividend of $ 200,000.
2. Atom reports $ 225,000 net income for 2020. Its stock price (i.e. fair value) on December 31, 2020 is $ 38 per share.
3. On November 1, 2021, Atom announces a total dividend of $ 250,000 to be paid on January 3, 2022.
4. Atom reports $ 320,000 net income for 2021. Its stock price (i.e. fair value) on December 31, 2021 is $ 44 per share.
5. On March 1, 2022, Chloe is approached by an investment fund which offers to buy 5,000 Atom shares for $ 45 per share. Chloe accepts the offer and sells the shares on that day.
Instructions
Assuming Chloe uses the Fair Value through Other Comprehensive Income model (FV-OCI) to account for this investment:
Question a) Prepare the journal entries in Chloe's books for the 2020 calendar year.
Question b) Prepare the journal entries in Chloe's books for the 2021 calendar year.
Question c) Prepare the journal entries in Chloe's books for the 2022 calendar year.
|
Impressionists became very interested in japanese art
: During this period, the Impressionists became very interested in Japanese art. Among those who collected Japanese prints were Monet, Degas, and Cassatt.
|
|
Find adjusting entry to accrue interest on note should debit
: The company to pay 8% interest on March 31 and September 30. On December 31, 2018, the adjusting entry to accrue interest on the note should debit
|
|
How do prepare the journal entry for the year-end adjustment
: How do Prepare the journal entry for the year-end adjustment to allowance for doubtful account balance as at December 31, 2020. Show supporting calculations.
|
|
Prepare the journal entry required on ADMS books
: The recourse provision has a fair value of $12,000. Prepare the journal entry required on ADMS's books on April 1. (Assume ADMS follows ASPE)
|
|
Prepare the journal entries in chloe books
: Prepare the journal entries in Chloe's books for the 2020 calendar year. Prepare the journal entries in Chloe's books for the 2021 calendar year.
|
|
Crime prevention through environmental design
: Discuss the concept of Crime Prevention Through Environmental Design (CPTD) as it pertains to the theory of Newman's "Creating Defensible Space"
|
|
How do calculate the fair value less cost to sell
: How do calculate the fair value less cost to sell? Denga Ltd has a machine that originally cost R1 000 000 and is depreciated on a straight-line
|
|
How does data become knowledge and finally wisdom
: How does data become knowledge and finally wisdom? Explain the relationship between knowledge acquisition, knowledge processing, knowledge generation,
|
|
Direction for healthcare organization strategic plan
: Why do you feel that an understanding of strategic alternatives provides structure and direction for a healthcare organization's strategic plan?
|