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  • Date Account Title Debit Credit: Cost Method Equity Method

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    Friska Avrilia
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    The document contains journal entries and financial statements for an investment in shares. It records the initial purchase of shares for $800,000 on January 1st. Throughout the year, dividends of $13,500 were received quarterly totaling $54,000 in dividend revenue. On December 31st, the shares were adjusted to their fair value of $1,080,000, resulting in an unrealized gain of $280,000. The document compares reporting the investment under the cost and equity methods of accounting.

    Original Description:

    Tugas Principle Accounting Chapter 13 Bagian Problem No.4

    Original Title

    p13.4

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    The document contains journal entries and financial statements for an investment in shares. It records the initial purchase of shares for $800,000 on January 1st. Throughout the year, dividends of $13,500 were received quarterly totaling $54,000 in dividend revenue. On December 31st, the shares were adjusted to their fair value of $1,080,000, resulting in an unrealized gain of $280,000. The document compares reporting the investment under the cost and equity methods of accounting.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    21 views4 pages

    Date Account Title Debit Credit: Cost Method Equity Method

    Uploaded by

    Friska Avrilia
    The document contains journal entries and financial statements for an investment in shares. It records the initial purchase of shares for $800,000 on January 1st. Throughout the year, dividends of $13,500 were received quarterly totaling $54,000 in dividend revenue. On December 31st, the shares were adjusted to their fair value of $1,080,000, resulting in an unrealized gain of $280,000. The document compares reporting the investment under the cost and equity methods of accounting.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 4

    a) Date Account Title Debit Credit

    1 Jan 20 Share Investments 800,000


    Cash 800,000

    15 Mar 20 Cash 13,500.00


    Dividend Revenue 13,500.00
    (45,000 x 0.30)

    15 Jun 20 Cash 13,500.00


    Dividend Revenue 13,500.00
    (45,000 x 0.30)

    15 Sep Cash 13,500.00


    Dividend Revenue 13,500.00
    (45,000 x 0.30)

    15 Des 20 Cash 13,500.00


    Dividend Revenue 13,500.00
    (45,000 x 0.30)

    31 Des 20 Fair Value adjustment-Trading 280,000.00


    Unrealized Gain or Loss - Income 280,000.00
    {(45,000 x 24)-(800,000)}

    b) Date Account Title Debit Credit


    1 Jan 20 Share Investments 800,000.00
    Cash 800,000.00

    15 Mar 20 Cash 13,500.00


    Share Investments 13,500.00
    (45,000 x 0.30)

    15 Jun 20 Cash 13,500.00


    Share Investments 13,500.00
    (45,000 x 0.30)

    15 Sep Cash 13,500.00


    Share Investments 13,500.00
    (45,000 x 0.30)

    15 Des 20 Cash 13,500.00


    Share Investments 13,500.00
    (45,000 x 0.30)

    31 Des 20 Share Investments 96,000.00


    Revenue from Share Investments 96,000.00
    (30% x 320,000)

    c) Cost Method Equity Method


    Share investments (Cost) 800,000.00 842,000.00
    Unrealized Gain-Income 280,000.00
    Dividend Revenue 54,000.00 0.00
    Revenue from Share Investments 0.00 96,000.00
    24 x 45,000 shares = 1080000
    800,000 + 96,000 - 54,000 = 842,000

    Cost Method
    Control Alt Design Ltd.
    Statement of Financial Position
    December 31, 2020

    Current Asset
    Short-term investment at fair value 1,080,000
    (800,000 + 280,000)

    Equity Method
    Control Alt Design Ltd.
    Statement of Financial Position
    December 31, 2020

    Investment
    Share Investment (800,000 + 96,000 - 54,000) 842000
    Control Alt Design Ltd.
    Income Statement
    At the Year Ended December 31, 2020

    Other Income and Expense


    Other Income
    Dividend Revenue 54000
    Unrealized Gain or Loss-Income 280000
    Total Other Income and Expense 334000

    Control Alt Design Ltd.


    Income Statement
    At the Year Ended December 31, 2020

    Other Income and Expense


    Other Income
    Revenue from Share Investments 96000
    (13.500+13.500+13.500+13.500)

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