Question
NN Company purchased 10,000 common shares of SS Inc. on January 1, Year 1 for $200,000. SS Inc. had 80,000 common shares outstanding. The following
NN Company purchased 10,000 common shares of SS Inc. on January 1, Year 1 for $200,000. SS Inc. had 80,000 common shares outstanding. The following information relates to SS Inc.:Net Income (loss)Dividends paid Market value/share at December 31 Year 1$280,000$70,000$18 Year 2$(120,000)$35,000$19
On January 1, Year 3, NN sold Investment in SS Inc. shares for $21 per share. NN has a December 31 year end.
Required: Show all calculations for full marksi) Prepare the journal entries for Years 1 and 2 and on January 1 Year 3 assuming the following independent scenarios: a) Investor plans to sell the shares in the short term for profit b) Elect to use FVTOCI c) Investor has significant influence
ii) How much is the change in Retained Earnings from January 1, Year 1 to January 1, Year 3 for each scenario? Show all #s for each year to support your total change
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