Flounders Inc., a publicly traded manufacturing company in the technology industry, has a November 30 fiscal year end. The company grew rapidly in its first 10 years and made three public offerings over this period. During its rapid growth period, Flounders acquired common shares in Yukasato Inc. and Admin Importers.

In 2009, Flounders acquired 25% of Yukasatos common shares for $587,800 and accounts for this investment using the equity method. The book value of Yukasatos net assets at the date of purchase was $1,804,000. The excess of the purchase price over the book value of the net assets relates to assets that are subject to amortization. These assets have a remaining life of 20 years. For its fiscal year ended November 30, 2020, Yukasato Inc. reported net income of $258,000 and paid dividends of $103,600.

In 2011, Flounders acquired 10% of Admin Importers common shares for $202,100 and accounts for this investment using the FV-OCI model.

Flounders also has a policy of investing idle cash in equity securities to generate short-term profits. The following data are for Flounders trading investment portfolio:

TRADING INVESTMENTS (using the FV-NI model) at November 30, 2019 Cost Fair Value Craxi Electric $327,200 $316,150 Renoir Inc. 187,550 184,700 Seferis Inc. 95,400 98,900 Total $610,150 $599,750 INVESTMENTS (using the FV-OCI model) at November 30, 2019 Admin Importers $202,100 $196,300 TRADING INVESTMENTS (USING THE FV-NI MODEL) at November 30, 2020 Cost Fair Value Craxi Electric $327,200 $324,150 Renoir Inc. 187,550 183,550 Mer Limited 107,800 110,500 Total $622,550 $618,200 INVESTMENTS (using the FV-OCI model) at November 30, 2020 Admin Importers $202,100 $203,050

On November 14, 2020, Ted Yan was hired by Flounders as assistant controller. His first assignment was to prepare the entries to record the November activity and the November 30, 2020 year-end adjusting entries for the current trading investments and the investment in common shares of Admin Importers. Using Flounders ledger of investment transactions and the data given above, Yan proposed the following entries and submitted them to Julie OBrien, controller, for review:

ENTRY 1 (NOVEMBER 8, 2020) Cash 100,000 FV-NI Investments 98,900 Gain on Disposal of InvestmentsFV-NI 1,100 (To record the sale of Seferis Inc. shares for $100,000) - Assume no change in fair value since November 31, 2019.

ENTRY 2 (NOVEMBER 26, 2020) FV-NI Investments 107,800 Cash 107,800 (To record the purchase of Mer Limited common shares for $105,200 plus brokerage fees of $2,600)

ENTRY 3 (NOVEMBER 30, 2020) Investment Income or Loss 3,400 Allowance for Investment Impairment 3,400 (To recognize a loss equal to the excess of cost over fair value of equity securities)

ENTRY 4 (NOVEMBER 30, 2020) Cash 39,250 Dividend Revenue 39,250 (To record the following dividends received from investments: Yukasato Inc. $25,900; Admin Importers $8,700; and Craxi Electric $4,650)

ENTRY 5 (NOVEMBER 30, 2020) Investment in Associate 64,500 Investment Income or Loss 64,500 (To record share of Yukasato Inc. income under the equity method, $258,000 0.25)

P. We have a parmi TRADING MESMO INVESTMENTS 20.09. TRADING MESSAGT PEMINILI tomber 2008 INTENTIPO IRY SPORE MTOM ronder which wyd when werelementy Bure Account and Explotice Belt ENTRY Desde Now Credi INTRY De Acid Credit recordar INTRY Date Account Ticken we wat Dit Credit a condividensived from inter where lorder does not have starterol TWS Flounders Inc, a publicly traded manufacturing company in the technology industry, has a November 30 fiscal year end..... grew rapidly in its first 10 years and made three public offerings over this period. During its rapid growth period, Flounders acquired common shares in Yukasato Inc. and Admin Importers. In 2009, Flounders acquired 25% of Yukasato's common shares for $587,800 and accounts for this investment using the equity method. The book value of Yukasato's net assets at the date of purchase was $1,804,000. The excess of the purchase price over the book value of the net assets relates to assets that are subject to amortization. These assets have a remaining life of 20 years. For its fiscal year ended November 30, 2020, Yukasato Inc. reported net income of $258,000 and paid dividends of $103,600. In 2011, Flounders acquired 10% of Admin Importers' common shares for $202,100 and accounts for this investment using the FV-OCI model. Flounders also has a policy of investing idle cash in equity securities to generate short-term profits. The following data are for Flounders' trading investment portfolio: TRADING INVESTMENTS (using the FV-Ni model) at November 30, 2019 Cost Fair Value Craxi Electric $327,200 $316,150 Renoir Inc. 187,550 184,700 Seferis Inc. 95,400 98,900 Total $610,150 $599,750 INVESTMENTS (using the FV-OCI model) at November 30, 2019 Admin Importers $202,100 $196,300 TRADING INVESTMENTS (USING THE FV-NI MODEL) at November 30, 2020 Cost Fair Value Craxi Electric $327,200 $324,150 Renoir Inc. 187,550 183,550 Mer Limited 107,800 110,500 Total $622,550 $618,200 INVESTMENTS (using the FV-OCI model) at November 30, 2020 Admin Importers $202,100 $203,050 On November 14, 2020, Ted Yan was hired by Flounders as assistant controller. His first assignment was to prepare the entries to record the November activity and the November 30, 2020 year-end adjusting entries for the current trading investments and the investment in common shares of Admin Importers. Using Flounders' ledger of investment transactions and the data given above, Yan proposed the following entries and submitted them to Julie O'Brien, controller, for review: ENTRY 1 (NOVEMBER 8, 2020) Cash 100,000 FV-NI Investments Gain on Disposal of Investments-FV-NI 1,100 (To record the sale of Seferis Inc. shares for $100,000) - Assume no change in fair value since November 31, 2019. 98,900 ENTRY 2 (NOVEMBER 26, 2020) FV-NI Investments 107,800 Cash 107,800 (To record the purchase of Mer Limited common shares for $105,200 plus brokerage fees of $2,600) ENTRY 3 (NOVEMBER 30, 2020) Investment Income or Loss 3,400 Allowance for Investment Impairment 3,400 (To recognize a loss equal to the excess of cost over fair value of equity securities) ENTRY 4 (NOVEMBER 30, 2020) 39,250 Cash Dividend Revenue 39,250 (To record the following dividends received from investments: Yukasato Inc. $25,900; Admin Importers $8,700; and Craxi Electric $4,650) ENTRY 5 (NOVEMBER 30, 2020) Investment in Associate 64,500 Investment Income or Loss 64,500 (To record share of Yukasato Inc. income under the equity method, $250,000 0.25) The journal entries proposed by Ted Yan will establish the value of Flounders' equity investments to be reported on the company's external financial statements. Review each journal entry and indicate whether it is in accordance with the applicable accounting standards. Accordance with Applicable Accounting Standards Entry 1 Entry 2 Entry 3 Yes/No Entry 4 Entry 5 If an entry is incorrect, or if an additional entry is required, prepare the correct entry(ies) that should have been made. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) ENTRY 1: Date Account Titles and Explanation Debit Credit ENTRY 2: Date Account Titles and Explanation Debit Credit Nov. 26 ENTRY 3: Date Account Titles and Explanation Debit Credit (To record fair value adjustment) (To record fair value adjustment) ENTRY 4: Date Account Titles and Explanation Debit Credit (To record dividends received from investments where Flounders' does not have significant influence) (To record dividend received from Yukasato Inc., accounted for using the equity method) ENTRY 5: Date Account Titles and Explanation Debit Credit P. We have a parmi TRADING MESMO INVESTMENTS 20.09. TRADING MESSAGT PEMINILI tomber 2008 INTENTIPO IRY SPORE MTOM ronder which wyd when werelementy Bure Account and Explotice Belt ENTRY Desde Now Credi INTRY De Acid Credit recordar INTRY Date Account Ticken we wat Dit Credit a condividensived from inter where lorder does not have starterol TWS Flounders Inc, a publicly traded manufacturing company in the technology industry, has a November 30 fiscal year end..... grew rapidly in its first 10 years and made three public offerings over this period. During its rapid growth period, Flounders acquired common shares in Yukasato Inc. and Admin Importers. In 2009, Flounders acquired 25% of Yukasato's common shares for $587,800 and accounts for this investment using the equity method. The book value of Yukasato's net assets at the date of purchase was $1,804,000. The excess of the purchase price over the book value of the net assets relates to assets that are subject to amortization. These assets have a remaining life of 20 years. For its fiscal year ended November 30, 2020, Yukasato Inc. reported net income of $258,000 and paid dividends of $103,600. In 2011, Flounders acquired 10% of Admin Importers' common shares for $202,100 and accounts for this investment using the FV-OCI model. Flounders also has a policy of investing idle cash in equity securities to generate short-term profits. The following data are for Flounders' trading investment portfolio: TRADING INVESTMENTS (using the FV-Ni model) at November 30, 2019 Cost Fair Value Craxi Electric $327,200 $316,150 Renoir Inc. 187,550 184,700 Seferis Inc. 95,400 98,900 Total $610,150 $599,750 INVESTMENTS (using the FV-OCI model) at November 30, 2019 Admin Importers $202,100 $196,300 TRADING INVESTMENTS (USING THE FV-NI MODEL) at November 30, 2020 Cost Fair Value Craxi Electric $327,200 $324,150 Renoir Inc. 187,550 183,550 Mer Limited 107,800 110,500 Total $622,550 $618,200 INVESTMENTS (using the FV-OCI model) at November 30, 2020 Admin Importers $202,100 $203,050 On November 14, 2020, Ted Yan was hired by Flounders as assistant controller. His first assignment was to prepare the entries to record the November activity and the November 30, 2020 year-end adjusting entries for the current trading investments and the investment in common shares of Admin Importers. Using Flounders' ledger of investment transactions and the data given above, Yan proposed the following entries and submitted them to Julie O'Brien, controller, for review: ENTRY 1 (NOVEMBER 8, 2020) Cash 100,000 FV-NI Investments Gain on Disposal of Investments-FV-NI 1,100 (To record the sale of Seferis Inc. shares for $100,000) - Assume no change in fair value since November 31, 2019. 98,900 ENTRY 2 (NOVEMBER 26, 2020) FV-NI Investments 107,800 Cash 107,800 (To record the purchase of Mer Limited common shares for $105,200 plus brokerage fees of $2,600) ENTRY 3 (NOVEMBER 30, 2020) Investment Income or Loss 3,400 Allowance for Investment Impairment 3,400 (To recognize a loss equal to the excess of cost over fair value of equity securities) ENTRY 4 (NOVEMBER 30, 2020) 39,250 Cash Dividend Revenue 39,250 (To record the following dividends received from investments: Yukasato Inc. $25,900; Admin Importers $8,700; and Craxi Electric $4,650) ENTRY 5 (NOVEMBER 30, 2020) Investment in Associate 64,500 Investment Income or Loss 64,500 (To record share of Yukasato Inc. income under the equity method, $250,000 0.25) The journal entries proposed by Ted Yan will establish the value of Flounders' equity investments to be reported on the company's external financial statements. Review each journal entry and indicate whether it is in accordance with the applicable accounting standards. Accordance with Applicable Accounting Standards Entry 1 Entry 2 Entry 3 Yes/No Entry 4 Entry 5 If an entry is incorrect, or if an additional entry is required, prepare the correct entry(ies) that should have been made. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) ENTRY 1: Date Account Titles and Explanation Debit Credit ENTRY 2: Date Account Titles and Explanation Debit Credit Nov. 26 ENTRY 3: Date Account Titles and Explanation Debit Credit (To record fair value adjustment) (To record fair value adjustment) ENTRY 4: Date Account Titles and Explanation Debit Credit (To record dividends received from investments where Flounders' does not have significant influence) (To record dividend received from Yukasato Inc., accounted for using the equity method) ENTRY 5: Date Account Titles and Explanation Debit Credit