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.