Question/40 marks HIKCC Investment Limited engaged in investment activities with the following companies = 122 financial year-endis December 31 ABC Limited Jan HKCC acquired 80,000 shares of ABC Limited fue $800,000 cash it representa 25 the outstanding ordinary shares) Jun 30 ABC declared and paid cash dividends of S05 each share Dec 31 ABC Limited paid cash dividends of $20,000 and reported net income of $60,000 Apr1 DEF Limited HKCC acquired bonds from DEF Limited at $900,000 and intends and can hold it its maturity (the mature date of the boods is 1 Apr 2005). The band has a face value of $1,000,000 and started interest rate at the market rate of similar ende the date of purchase Empower adopt the effective interest method to account for the amortization of bonds discounts or premium Oct 1 DEF Limited declared the semiannual interest first interest payment was duece 1 October 2022 GHI Lited May 1 HKCC purchased 6,000 GHI Limited shares at S10 each with commissie 51.500 Investment for Limited in tratadas trading securities Aug 31 It sold out half of GHI's shares at Sis less commission and brokerage fee of 2.000 31 August Dec 31 GHI Limited declared and paid cash dividends S2 for each share JKL Limited HOC acquired 5,000 IKL Limited shares a $50.000. Investment for JKL tamad classified as non-trading Dec 31 JKL Limited declared and paid cash dividends S13 for each har Other Information The market price of fair value of the investments at the financial year end we shown as below ABC Limited 518 per share DEF Limited 5900.000 band) ||| Limited $1} sharg JKL. Limited: Il per share Page 4 Required: Prepare all relevant jumal entries for the above investments happened in 2022. rounded to the nearest dollar for cached the following companies a) ABC Limited b) DEF Limited (13 c) GR Limited d) KL Limited End of Assignment Question 2 (40 marks) HKCC Investment Limited engaged in investment activities with the following companies in 2022. Its financial year-end is December 31. ABC Limited Jan 1 HKCC acquired 80,000 shares of ABC Limited for $800,000 cash (it represents 25% of the outstanding ordinary shares). Jun 30 ABC declared and paid cash dividends of $0.5 each share. Dec 31 ABC Limited paid cash dividends of $20,000 and reported net income of $500,000. DEF Limited Apr 1 HKCC acquired bonds from DEF Limited at $900,000 and intends and can hold it until its maturity (the mature date of the bonds is 1 Apr 2025). The bond has a face value of $1,000,000 and stated interest rate at 6%. The market rate of similar bonds is 9% at the date of purchase. Empower adopts the effective interest method to account for the amortization of bonds discounts or premiums. Oct 1 DEF Limited declared the semi-annual interest. Its first interest payment was due on 1 October 2022 GHI Limited May 1 HKCC purchased 6,000 GHI Limited shares at $10 each with commission fee $1,500. Investment for GHI Limited is treated as trading securities. Aug 31 It sold out half of GHI's shares at $18 less commission and brokerage fee of 2,000 on 31 August Dec 31 GHI Limited declared and paid cash dividends S2 for each share. JKL Limited Jul 1 HKCC acquired 5,000 JKL Limited shares at $50,000. Investment for JKL Limited is classified as non-trading. Dec 31 JKL Limited declared and paid cash dividends $1.8 for each share. Other information: The market price or fair value of the investments at the financial year-end are shown as below: ABC Limited: $18 per share DEF Limited: $900,000 (bond) GHI Limited: $13 per share JKL Limited: 11 per share Required: Prepare all relevant journal entries for the above investments happened in 2022. (Answers should be rounded to the nearest dollar) for each of the following companies: a) ABC Limited (8 marks) b) DEF Limited (13 marks) c) GHI Limited (12 marks) d) JKL Limited (7 marks) End of Assignment 1 - Question/40 marks HIKCC Investment Limited engaged in investment activities with the following companies = 122 financial year-endis December 31 ABC Limited Jan HKCC acquired 80,000 shares of ABC Limited fue $800,000 cash it representa 25 the outstanding ordinary shares) Jun 30 ABC declared and paid cash dividends of S05 each share Dec 31 ABC Limited paid cash dividends of $20,000 and reported net income of $60,000 Apr1 DEF Limited HKCC acquired bonds from DEF Limited at $900,000 and intends and can hold it its maturity (the mature date of the boods is 1 Apr 2005). The band has a face value of $1,000,000 and started interest rate at the market rate of similar ende the date of purchase Empower adopt the effective interest method to account for the amortization of bonds discounts or premium Oct 1 DEF Limited declared the semiannual interest first interest payment was duece 1 October 2022 GHI Lited May 1 HKCC purchased 6,000 GHI Limited shares at S10 each with commissie 51.500 Investment for Limited in tratadas trading securities Aug 31 It sold out half of GHI's shares at Sis less commission and brokerage fee of 2.000 31 August Dec 31 GHI Limited declared and paid cash dividends S2 for each share JKL Limited HOC acquired 5,000 IKL Limited shares a $50.000. Investment for JKL tamad classified as non-trading Dec 31 JKL Limited declared and paid cash dividends S13 for each har Other Information The market price of fair value of the investments at the financial year end we shown as below ABC Limited 518 per share DEF Limited 5900.000 band) ||| Limited $1} sharg JKL. Limited: Il per share Page 4 Required: Prepare all relevant jumal entries for the above investments happened in 2022. rounded to the nearest dollar for cached the following companies a) ABC Limited b) DEF Limited (13 c) GR Limited d) KL Limited End of Assignment Question 2 (40 marks) HKCC Investment Limited engaged in investment activities with the following companies in 2022. Its financial year-end is December 31. ABC Limited Jan 1 HKCC acquired 80,000 shares of ABC Limited for $800,000 cash (it represents 25% of the outstanding ordinary shares). Jun 30 ABC declared and paid cash dividends of $0.5 each share. Dec 31 ABC Limited paid cash dividends of $20,000 and reported net income of $500,000. DEF Limited Apr 1 HKCC acquired bonds from DEF Limited at $900,000 and intends and can hold it until its maturity (the mature date of the bonds is 1 Apr 2025). The bond has a face value of $1,000,000 and stated interest rate at 6%. The market rate of similar bonds is 9% at the date of purchase. Empower adopts the effective interest method to account for the amortization of bonds discounts or premiums. Oct 1 DEF Limited declared the semi-annual interest. Its first interest payment was due on 1 October 2022 GHI Limited May 1 HKCC purchased 6,000 GHI Limited shares at $10 each with commission fee $1,500. Investment for GHI Limited is treated as trading securities. Aug 31 It sold out half of GHI's shares at $18 less commission and brokerage fee of 2,000 on 31 August Dec 31 GHI Limited declared and paid cash dividends S2 for each share. JKL Limited Jul 1 HKCC acquired 5,000 JKL Limited shares at $50,000. Investment for JKL Limited is classified as non-trading. Dec 31 JKL Limited declared and paid cash dividends $1.8 for each share. Other information: The market price or fair value of the investments at the financial year-end are shown as below: ABC Limited: $18 per share DEF Limited: $900,000 (bond) GHI Limited: $13 per share JKL Limited: 11 per share Required: Prepare all relevant journal entries for the above investments happened in 2022. (Answers should be rounded to the nearest dollar) for each of the following companies: a) ABC Limited (8 marks) b) DEF Limited (13 marks) c) GHI Limited (12 marks) d) JKL Limited (7 marks) End of Assignment 1
