Tugas Mata Kuliah Prof Dr Apollo (Daito): Akuntansi Keuangan Lanjutan II

Prepare journal entries on the book of Percy Company from the date purchase through 2011 to account for its investment in Song Company uses the cost method to record the investment.

Solution:

Journal Entry at the beginning of 2009

Jan 1, 2009 ||Investment in Song                                                     $387,000

Cash in bank                                                                                       $387,000

To record Percy Company purchased 80% of the outstanding voting shares of Song Company

Year 1 book 2009

Jan 1, 2009 || Cash ($25,000 x 80%)                                               $  20,000

Dividend Received                                                                             $ 20,000

Year 2 book 2010

Jan 1, 2010 || Cash ($50,000 x 80%)                                                $ 40,000

Dividend Received                                                                              $ 40,000

Year 3 book 2011

Jan 1, 2011 || Cash ($35,000 x 80%)                                                 $ 28,000

Dividend Received                                                                               $ 28,000