Question
1. On January 1, 2020, Ci Company acquired 60,000 shares of Bee Limited at $25 per share. 2. On May 31, 2020, Bee declared and
1. On January 1, 2020, Ci Company acquired 60,000 shares of Bee Limited at $25 per share.
2. On May 31, 2020, Bee declared and paid a dividend of $3 per share.
3. Bees net income for 2020 was $1,000,000.
4. On December 31, 2020, Bees shares were trading on the Toronto Stock Exchange at $31 per share.
Assume Ci Company issues financial statements on an annual basis.
Required:
A. Prepare Cis journal entries for these transactions, assuming this purchase represents 25% of Bees voting shares
B. Prepare the journal entries for these transactions, assuming this purchase represents 15% of Bees voting shares. Cis management intends to trade these shares for a profit in the near future. In addition to the transactions above, assume that on August 1, 2020, Ci sold 10,000 shares for $28 per share.
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