Prepare the journal entries required by gant ltd

Assignment Help Accounting Basics
Reference no: EM133062315

Question - On 1 July 2019, Gant Ltd purchased 35% of the shares of Cold Ltd at a cost of $98,000. Gant Ltd does not control Cold Ltd but does have significant influence. The carrying amounts of Cold Ltd's net assets (at fair value) at date of acquisition and subsequent balance dates were as follows:

Equity

1/7/2019

30/6/2020

30/6/2021

Share capital

215,000

215,000

215,000

Revaluation reserve

10,000

12,000

12,000

Retained earnings

55,000

150,000

200,000

On 25 September 2019, Gant Ltd paid a final dividend of $30,000 from profits that existed at date of acquisition. On 5 June 2021 Cold Ltd paid a final dividend of $25,000 from current period profits. No other dividends have been paid.

Required -

1. Prepare the journal entries required by Gant Ltd relating to its Investment in Cold Ltd for the period from 1 July 2019 to 30 June 2021.

2. Show the journal entry(s) and explain how Gant Ltd would record the Investment in Cold Ltd under the Equity method as at 1 July 2019 if the purchase consideration had been $127,000.

Reference no: EM133062315

Questions Cloud

What is the amount of the gain or loss on this transaction : Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction
Explain the ways in which leaders influence individuals : Explain the ways in which leaders influence individuals and organizations - Discussion on how applying the theory will impact the individual and organization
Prepare the purchase budget for the second and third quarter : Desired ending inventory is 25% of the following quarter's cost of sales. Prepare the purchase budget for the second and third quarter of 2022
Prepare the closing entries in the general journal : Prepare the closing entries in the general journal for Sweet Home Alabama Treats for the year ending 30 June 2021
Prepare the journal entries required by gant ltd : Prepare the journal entries required by Gant Ltd relating to its Investment in Cold Ltd for the period from 1 July 2019 to 30 June 2021
Calculate the payback period of investment : The vehicles will cost $55,000 each to buy, payable in full immediately. Calculate the Payback Period of investment in the delivery vehicles
Why is it favorable to invest in different investable assets : Given the things you have learned about mutual funds; will you invest in it? Why or why not?
What is the future value of cash flows : Troy will receive $7,500 at the end of Year 2. At the end of the following two years, he will receive $9,000 and $12,500, respectively.
How much is the adjustment for lost units : During the month, entity has used $198,708.75 worth of materials in production and spent $233,775 for conversion costs. How much is adjustment for lost units

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd