Acquiring Shares and Paying Dividend: Company ABC Journal Entries
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On 1/1/2012 Company ABC acquires 20,000 shares of company XYZ at cash price of $10 per share. Company XYZ has 300,000 shares issued and outstanding. On 6/15/12, Company XYZ declares dividends of $2 per share. These dividends are paid on 7/1/12. For the period of 1/1/12 to 12/31/12 Company XYZ has a net loss of $600,000 and the market price of its shares is $12 per share.
Make journal entries for Company ABC.
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Solution Summary
Your tutorial with instructional notes about the levels of ownership dictating treatment are attached in Excel.
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Since this is not the equity method or a consolidated statement, the earnings ...
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