3) On January 1, 2015, Red Company purchased 90% of the common stock of Moon Company by issuing 10,000 shares of its (Red) OMR10 par value common stock with a market price of OMR15 per share. Red incurred cash expenses of OMR 8,000 for registering and issuing the common stock. The stockholders equity sections of the two companies balance sheets on December 31, 2014, were: Moon Red Common Stock, $10 par value 350,000 240,000 Preference Share capital 150,000 170,000 Other Contributed Capital 590,000 80,000 Retained Earnings 380,000 130,000 Required: A. Prepare the journal entry(s) on the books of Red Company to record the purchase of the common stock of Moon Company and related expenses. B. Prepare the elimination entry(s) required for the preparation of a consolidated balance sheet work paper on the date of acquisition.

4) On January 1 2013, Ahmed Company purchased 90,000 of the 100,000 outstanding shares of common stock of Singer Company as a longer-term investment. The purchase price of OMR 4,850,000 was paid in cash. Additional data on Singer Company for the four years following the purchase are 2013 2014 2015 2016 Net Income (loss) 1,800,000 700,000 (320,000) (260,000) Cash dividends paid, 12/30 500,000 500,000 500,000 500,000 Required: Prepare journal entries under each of the following methods to record the purchase and all investment-related subsequent events on the books of Ahmed Company for the four years. a) Ahmed uses the cost method to account for its investment in Singer. b) Ahmed uses the partial equity method to account for its investment Singer.