PLEASE ONLY DO THE PART B I HAVE FINISHED THE FIRST PART
Duffy Dog Limited has a total of 210,000 common shares issued. On October 3, 2020, CT Inc. purchased a block of these shares in the open market at $50 per share to hold as a long-term equity investment. Duffy Dog reported net income of $542,000 for the year ended September 30, 2021, and CT received a $0.26-per-share dividend on that date. Duffy Dog's shares were trading at $54 per share at September 30, 2021. This problem assumes three independent situations related to the accounting for this investment by CT: Situation 1: CT purchased 23,100 Duffy Dog common shares. Situation 2: CT purchased 73,500 Duffy Dog common shares. Situation 3: CT purchased 210,000 Duffy Dog common shares. (a) Your answer has been saved. See score details after the due date. 1. For situation 1, is it likely that CT has significant influence over the investee? No If it does not, record all journal entries relating to the investment for the year ended September 30, 2021, using the fair value through profit or loss model. If CT has significant influence, use the equity method to record these transactions. (List all debit entries before credit entries. 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.) Date Account Titles and Explanation Debit Credi Oct. 3, 2020 Investment in Associates 1155000.00 Cash 11! Sept. 30, 2021 Cash 6006.00 Dividend Income (To record dividends) Sept. 30, 2021 V Investment in Associates 92400.00 Unrealized Gain on Long-Term Investments (To record unrealized gain on investment) 2. From the journal entries prepared in (1), calculate the ending balance in the investment account and any related investment income accounts. (If an answer is zero, please enter 0. Do not leave any fields blank.) Long-term investments $ 1247400.00 Dividend Income 6006.00 Unrealized gain on long-term investments 92400.00 e Textbook and Media List of Accounts Attempts: 1 of 1 used (b) 1. For situation 2, is it likely that CT has significant influence over the investee? If it does not have significant influence, record all journal entries relating to the investment for the year ended September 30, 2021, using the fair value through profit or loss model. If CT does have significant influence, use the equity method to record these transactions. (List all debit entries before credit entries. 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.) Date Account Titles and Explanation Debit Credi (To record dividends) (To record share in profit) 2. From the journal entries prepared in (1),calculate the ending balance in the investment account and any related investment income accounts. (If an answer is zero, please enter 0. Do not leave any fields blank.) Investments in associates $ Dividend income Income from associates
