Question
The founder, president, and major shareholder of Dewitt Corp. recently sold his controlling interest in the company to a national distributor in the same line
The founder, president, and major shareholder of Dewitt Corp. recently sold his controlling interest in the company to a national distributor in the same line of business. The change in ownership was effective June 30, 2020, halfway through Dewitts current fiscal year. During the due diligence process of acquiring the company and over the last six months of 2020, the new senior management team had a chance to review the companys accounting records and policies. Dewitt follows ASPE. Although EPS is not part of ASPE, management calculates EPS for its own purposes and applies the IFRS guidelines. By the end of 2020, the following decisions had been made.
Dewitts financial statements (summarized) were as follows at December 31, 2019 and 2020, before any corrections related to the information above. The December 31, 2020 statements are in draft form only and the 2020 accounts have not yet been closed.
a) Prepare any December 31, 2020 journal entries that are necessary to put into effect the decisions made by senior management. b) Prepare the comparative statement of financial position that will be issued to shareholders for the year ended December 31, 2020. c) Prepare the income statement that will be issued to shareholders for the year ended December 31, 2020. d) Prepare the statement of retained earnings that will be issued to shareholders for the year ended December 31, 2020. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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