Reference no: EM132966847
Heritage Ltd. was organized on January 2, 2020. The following investment transactions and events occurred during the following months:
2020
Jan.6 Heritage paid $579,500 for 50,400 shares (20%) of Port Inc. outstanding common shares.
Apr.30 Port declared and paid a cash dividend of $1.50 per share.
Dec.31 Port announced that its profit for 2020 was $520,000. Fair value of the shares was $12.20 per share
2021:
Oct.15 Port declared and paid a cash dividend of $1.10 per share.
Dec.31 Port announced that its profit for 2021 was $670,000. Fair value of the shares was $12.58 per share
2022
Jan.5 Heritage sold all of its investment in Port for $686,000 cash.
Assume that Heritage has a significant influence over Port with its 20% share.
Required:
Problem 1. Prepare the entries to record the preceding transactions in Heritage's books.
Problem 2. Calculate the carrying value per share of Heritage's investment as reflected in the investment account on January 4, 2022. (Round your answer to 2 decimal places.)
Problem 3. Calculate the change in Heritage's equity from January 2, 2020, through January 5, 2022, resulting from its investment in Port.
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