$1$

Sol Corporation acquired

$1$

$0$

$\%$

$$of the

$2$

$0$

$,$

$0$

$0$

$0$

$$outstanding ordinary shares of K Electronics at a cost of $

$3$

$0$

$$per share on Dec

$1$

$,$

$2$

$0$

$2$

$2$

$.$

$$ On December

$3$

$0$

$,$

$$K Electronics declared and paid a $

$5$

$0$

$,$

$0$

$0$

$0$

$$dividend$.$ On December

$3$

$1$

$,$

$$K Electronics reported net income of $

$2$

$0$

$0$

$,$

$0$

$0$

$0$

$$for the year. On December

$3$

$1$

$,$

$$the market price of K Electronics was $

$4$

$0$

$$per share. This investment is classified as

$$

trading

$$

$$

$($

a

$)$

$$Please prepare all necessary journal entries for

$2$

$0$

$2$

$2$

$$transaction above

$$

$($

b

$)$

$$Please describe how Sol Corporation will report the

$$

$($

$1$

$)$

$$investment on the balance sheet

$$

$($

$2$

$)$

$$income and unrealized gain on its

$2$

$0$

$2$

$2$

$$financial statements

$$

$($

c

$)$

$$On January

$5$

$,$

$2$

$0$

$2$

$3$

$,$

$$the company sold the investment in K Electronics at $

$3$

$8$

$$per share. On Dec

$2$

$0$

$,$

$2$

$0$

$2$

$3$

$,$

$$Company acquired

$1$

$,$

$0$

$0$

$0$

$$shares of Apple Co

$.$

$$ordinary shares at $

$1$

$5$

$0$

$$per share for

$$

trading

$$

$.$

$$On December

$3$

$1$

$,$

$2$

$0$

$2$

$3$

$,$

$$Apple stock was closed at $

$1$

$4$

$0$

$$per share.

$$

$($

$1$

$)$

$$Please prepare

$2$

$0$

$2$

$3$

$$journal entries for above transactions.

$($

$2$

$)$

$$Please describe how the company will report the investment on the balance sheet

$$

$1$

$-$

$2$

$.$

$$If Sol Corporation

$$

s investment in K Electronics was classified as

$$

non

$-$

trading

$$

$,$

$$Please prepare all necessary journal entries for

$2$

$0$

$2$

$2$

$$and describe how Sol Corporation will report the investment, income and unrealized gain on its

$2$

$0$

$2$

$2$

$$financial statements

$$

$$

$$

$$

$2$

$.$

$$Sol Inc., obtained significant influence over Charlie Company by acquiring

$2$

$5$

$\%$

$$of Charlie Corp's

$1$

$0$

$0$

$,$

$0$

$0$

$0$

$$outstanding ordinary shares at a total cost of $

$2$

$0$

$$per share on January

$1$

$,$

$2$

$0$

$2$

$2$

$.$

$$On June

$1$

$5$

$,$

$$K Corp declared and paid a cash dividend of $

$1$

$$per share. On December

$3$

$1$

$,$

$$Charlie Corp. reported a net income of $

$3$

$0$

$0$

$,$

$0$

$0$

$0$

$$for the year.

$$

Instructions

$($

$1$

$)$

$$Prepare all the necessary journal entries for

$2$

$0$

$2$

$2$

$$for Sol Inc