Question
On January 1, Year 11, Rohan Corporation purchased 15,000 common shares of Singh Ltd for $8.50 per share plus $2,500 in commission. Singh Ltd had
On January 1, Year 11, Rohan Corporation purchased 15,000 common shares of Singh Ltd for $8.50 per share plus $2,500 in commission. Singh Ltd had 100,000 common shares outstanding. During Year 11, Singh earned net income of $80,000. On December 31, Year 11, Singh declared dividends of $20,000. The investment in Singh Ltd shares were trading at $9.30 per share at December 31, Year 11. On February 1, Year 12, Singh paid the dividends. During Year 12, Singh incurred a net loss of $40,000. At December 31, Year 12, investment in Singh Ltd shares was trading at $8.90 per share. January 15, Year 13, Rohan sold its investment in Singh Ltd for $9.20 per share less $500 in commission Rohan elected to account for its passive investments in shares under Fair Value thru OCI method and record dividends income separately. Rohan year end is December 31. Required: i) Prepare all journal entries for Year 11 and Year 12 (8 marks). ii) Prepare the journal entry(ies) to record the sale on January 15, Year 13 and any closing entry relating to the sale (5 marks). Show all calculations for full marks. Round to the nearest dollar
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