Question
Question #1 : On December 31, 2016, Ogallala Associates owned the following securities whose total fair value was equal to their cost. The securities were
Question #1: On December 31, 2016, Ogallala Associates owned the following securities whose total fair value was equal to their cost. The securities were held as a long-term investment and not for influence or control of the investee.
Ordinary Shares Shares Cost Cost /share
Carlene Co. 2,000 60,000 30
Riverdale Co. 5,000 45,000 9
Raczynski Co. 1,500 30,000 20
135,000
In 2017, the following transactions occurred.
Aug. 1 Received 0.70 per share cash dividend on Carlene Co. ordinary shares.
Sept. 1 Sold 2,000 ordinary shares of Riverdale Co. for cash at 8 per share.
Oct. 1 Sold 725 ordinary shares of Carlene Co. for cash at 33 per share.
Nov. 1 Received 1 per share cash dividend on Raczynski Co. ordinary shares.
Dec. 15 Received 0.70 per share cash dividend on Carlene Co. ordinary shares.
31 Received 1 per share annual cash dividend on Riverdale Co. ordinary shares.
At December 31, 2017, fair values per share of the ordinary shares were Carlene Co. 32, Riverdale Co. 8, and Raczynski Co. 18.
Instructions: Journalize 2017 transactions. Then, post only to the account Share lnvestments. (T-account below).
(a) GENERAL JOURNAL | |||
Aug. | Account Title | Debit | Credit |
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Sep. | Account Title | Debit | Credit |
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Oct. | Account Title | Debit | Credit |
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Nov. | Account Title | Debit | Credit |
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Dec. | Account Title | Debit | Credit |
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Dec. | Account Title | Debit | Credit |
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Post above transactions to the account Share lnvestments. (Use T-account below).
SHARE INVESTMENTS | ||
12/31/16 Bal. 135,000
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Instructions: Record the required adjusting entry at December 31, 2017, to show the securities on-hand at fair value.
(b) GENERAL JOURNAL | |||
Dec. | Account Title | Debit | Credit |
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Instructions: Show the statement of financial position presentation of investments and equity at December 31, 2017. At this date, Ogallala Associates has share capital-ordinary 1,500,000 and retained earnings 1,100,000.
(c) OGALLALA ASSOCIATES Partial Consolidated Statement of Financial Position December 31, 2017 | |||
Investments | |||
Investments in shares of less than 20% owned companies, at fair value |
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Total investments: |
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Equity | |||
Share capitalordinary |
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Retained earnings . |
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Accumulated other comprehensive loss |
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Total equity: |
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