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25 August, 14:34

Rowan Co. purchases 100 common shares (40%) of JBI Corp. as a long-term investment for $500,000 cash on July 1. JBI Corp. paid $5,000 in total cash dividends on November 1 and reported net income of $100,000 for the year. (1) - (3) Prepare Rowan's entries to record the purchase of JBI shares, the receipt of its share of JBI dividends and the December 31 year-end adjustment for its share of JBI net income.

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  1. 25 August, 16:12
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    this is the investment associate because percentage of holding is more than 20% and Less than 50% and will be accounted for as per IAS-28

    investment in Associate equity accounting

    Entries in books

    Investment held for sale 500000

    Cash 500000

    to record the purchase of shares for $500000

    Cash 5000

    Dividend income P/L 5000

    to record the dividend income in profit and loss account

    No Entries for share of profit in seprate books
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Home » Business » Rowan Co. purchases 100 common shares (40%) of JBI Corp. as a long-term investment for $500,000 cash on July 1. JBI Corp. paid $5,000 in total cash dividends on November 1 and reported net income of $100,000 for the year.
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