Chapter 1 Problem 11-9
2008
Jan. 1 Investment in associate 8,000,000
Cash 8,000,000
Dec. 31 Investment in associate 1,500,000
Investment income (30% x 5,000,000) 1,500,000
31 Cash (30% x 2,000,000) 600,000
Investment in associate 600,000
142
2009
June 30 Investment in associate 1,800,000
Investment income (30% x 6,000,000) 1,800,000
July 1 Cash 6,000,000
Investment in associate (10,700,000 x 1/2) 5,350,000
Gain on sale of investment 650,000
Oct. 1 Cash (2,500,000 x 15%) 375,000
Dividend income 375,000
1 Available for sale securities 5,350,000
Investment in associate 5,350,000
(Reclassification)
Dec. 31 No entry is required for the share in net income
because the investor is now using the fair value
method by reason on the reduced 15% interest.
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