UNIVERSITAS BUDI LUHUR

FAKULTAS EKONOMI DAN BISNIS

UJIAN TENGAH SEMESTER GENAP TAHUN AKADEMIK 2020/2021

Mata Kuliah : Akuntansi Keuangan Menengah 2
Hari/Tanggal : Rabu / 21 April 2021
Jam/waktu : 08.00 - 10.30
Kelompok : GA
Sifat Ujian : Take Home
Dikumpulkan : Rabu / 28 April 2021 pukul 00.00

Equity Transaction and Statement Preparation

On January 1, 2015, Martinez Corporation receive a charter granting the right to issue
6.500 shares of $150 par value, 9% cumulative and non participating preference
shares, and 65.000 shares of $ 15 par value ordinary shares. It then completed the
transactions.
Jan. 10 Issued 25.000 ordinary shares at $ 17 per share.
Feb. 3 Issued to Hagar Company 5.000 preference shares for the follolwing
assets: machinery with a fair value $ 55.000; a factory building with fair
value of $ 170.000; and land with an appraised value of $ 300.000.
Jun. 30 Purchase 2.000 ordinary shares at $ 20 per shares. (Use cost method)
Sept. 25 Sold the 2.000 treasury shares at $ 15 per share.
Dec 31 Declared a $ 0.50 per share cash dividend on the ordinary shares and
declared the preference dividend.
Dec 31 Closed the Income Summary account. There was $ 190.000 net income.

Instruction:
a) Record the journal entries for the transaction listed above.
b) Prepare the equity section of Martinez Corporation’s statement of financial position
on December 31, 2015.

Conversion of Bonds
Plum Corp issued $ 500.000 of 10%, 10 year convertible bonds on June 2016. The
bonds were date June 1, 2016, with interest payable June 1 and December 1. Bond
discount is amortized semiannually using the effective-interest method. The net
present value of the bonds without the conversion feature discounted at 11% (its
market rate) was $ 3.400.000.
On June 1, 2017, $ 1.200.000 of these bonds were converted into 35.000 shares of $
28 par value ordinary shares. Accrued interest was paid in cash at the time of
conversion.

Instruction
a) Prepare the entry to record the issuance of th convertible bond on June 1 2016.
b) Prepare the entry o record the interest expense at December 1, 2016.
c) Prepare the entry(ies) to record the conversation n June 1, 2016. (The book value
method is used).

Fair Value and Equity Method Compared

Washington Inc. Acquired 20% of the outstanding ordinary shares of Kennedy Corp
on December 31, 2013. The purcase price was $ 150.000 shares. Kennedy Corp
declared and paid an $ 100 per share cash dividend on June 30 and on December 31,
2014. Income of $ 4.500.000 for 2014. The fair value of Kennedy shares was $ 3.200
per share at December 31, 2014.

Instruction
a) Prepare the journal entries of Washington Inc for 2013 dn 2014, assuming that
Washington cannot exercise signification influence over Kennedy Corp. The
investments should be, classified as trading.
b) Prepare the journal entries for Washington Inc for 2013 and 2014, assuming that
Washington Inc can exercise significant influence over Kennedy Corp.
c) At the ammount is the investment reported on the statement of financial position
under each of these methods at December 31, 2014? What is the total next income
reported in 2014 under each of these methods?

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