Solution-Create entry for marco bhd relate to equity

Create entry for marco bhd relate to equity investment

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Reference no: EM132524736

Marco Bhd purchased the following equity investments which are traded at Bursa Malaysia on 1 October 2017:

(i) 10,000 shares of Komar Bhd at RM1.50 per share. Transaction cost incurred was RM2,500. Marco Bhd intends to sell shares of Komar Bhd in early 2018 to take advantage of the changes in the share prices.

(ii) 80,000 shares of Ram Bhd at RM1.80 per share. Transaction cost incurred was RM5,000. Marco Bhd intends to establish these shares as a non-trading investment.

In each investment above, Marco Bhd acquired less than 20 percent of interest in the company. Marco Bhd received a cash dividend of RM0.05 per unit of its investment in shares of Ram Bhd on 20 December 2017. On 31 December 2017 (financial year end), the fair value per share of Komar Bhd and Ram Bhd were RM1.60 and RM2.00 respectively. Marco Bhd sold all shares of Komar Bhd at the selling price of RM1.90 per share on 5 March 2018.

REQUIRED:

Question 1: Prepare journal entries for Marco Bhd related to equity investments above.

Reference no: EM132524736

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Create entry for marco bhd relate to equity investment

Reference no: EM132524736

Reference no: EM132524736

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