Question
On December 31, 2016, Platinum Company owned 9,000 of Silver Company's 10,000 ordinary shares for which it paid $500,000. On January 1, 2017, Platinum
On December 31, 2016, Platinum Company owned 9,000 of Silver Company's 10,000 ordinary shares for which it paid $500,000.
On January 1, 2017, Platinum Company sold 900 shares of its investment in Silver Company for $53,000.
On January 1, 2018, Platinum Company sold 4,800 shares of its investment in Silver Company for fair value of $59 per share.
Platinum records its investment in Silver for internal purposes using the cost method.
Required: (Show all calculations clearly)
a) Show the journal entry(ies) in the accounting records of Platinum Company for the January 1, 2017 transaction.
b) Show the journal entry(ies) in the accounting records of Platinum Company for the January 1, 2018 transaction.
Step by Step Solution
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Step: 1
Answer To solve this problem we need to calculate the gain or loss on the sale of the shares of Silv...
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Advanced Accounting
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
11th edition
538480289, 978-0538480284
