Question #1

On April 1, 2020, Jenson Ltd., a private enterprise, acquired 2,500 shares of Lam Corp. for $50,000. This investment represents a 18% interest in Lam Corp. and Jenson Ltd. uses the cost method to record the investment. On October 31, 2020, Lam Corp. paid a $42,000 dividend to its shareholders. At March 31, 2021, Lam Corp.'s shares were valued at $45 per share and Lam Corp. reported net income of $145,000 for the year. On May 15, 2021, Jenson Ltd. sold the shares for $20,000. Both Jenson Ltd. and Lam Corp. have March 31, 2021 year-ends.

Required:

Prepare dated journal entries for the investment on the acquiring company's books from acquisition to disposal. Ignore income taxes. Journal entry descriptions are optional.

Question #2

On May 1, 2020, Bear Inc. acquired 1,250 shares of Cub Ltd. for $60,000. This investment represents a 14% interest in Cub Ltd. Bear Inc. has classified this investment as FVTLP. On December 31, 2020, Cub Ltd. paid a $50,000 dividend to its shareholders. At June 30, 2021, Cub Ltd.s shares were valued at $40 per share and Cub Ltd. reported a net loss of $20,000 for the year. On September 15, 2021, Bear Inc. sold the shares for $90,000. Both Bear Inc. and Cub Ltd. have June 30, 2021 year ends.

Required:

Prepare dated journal entries for the investment on the acquiring company's books from acquisition to disposal. Ignore income taxes. Journal entry descriptions are optional.

Question #3

On March 1, 2020, JBJ Co. acquired 1,000 shares of Hoi Co. for $40,000. This investment represents a 15% interest in Hoi Co. JBJ Co. has classified this investment as FVTOCI. On November 30, 2020, Hoi Co. paid a $35,000 dividend to its shareholders. On February 28, 2021, Hoi Co.s shares were valued at $50 per share and Cub Ltd. reported a net income of $170,000 for the year. On April 15, 2021, JBJ Co. sold the shares for $75,000. Both JBJ Co. and Hoi Co. have February 28, 2021 year ends.

Required:

Prepare dated journal entries for the investment on the acquiring company's books from acquisition to disposal. Ignore income taxes. Journal entry descriptions are optional.

Question #4

On May 1, 2020, Clark Inc. acquired 1,250 shares of Mayson Ltd. for $75,000. This investment represents a 16% interest in Mayson Ltd. and Clark Inc. has significant influence. On December 31, 2020, Mayson Ltd. paid a $35,000 dividend to its shareholders. On April 30, 2021, Mayson Ltd.s shares were valued at $30 per share and Mayson Ltd. reported a net income of $27,000 for the year. On June 15, 2021, Clarke Inc. sold the shares for $37,000. Both Clarke Inc. and Mayson Ltd. have April 30, 2021 year ends.

Required:

Prepare dated journal entries for the investment on the acquiring company's books from acquisition to disposal. Ignore income taxes. Journal entry descriptions are optional.