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Tuecke s Concrete acquired 20% of the outstanding ordinary shares of Drew, Ltd. on January 1, 2017, by paying £100000 for 40000 shares Drew declared and paid a £050 per share cash dividend

Tuecke s Concrete acquired 20% of the outstanding ordinary shares of Drew, Ltd. on January 1, 2017, by paying £1,100,000 for 40,000 shares. Drew declared and paid a £0.50 per share cash dividend on June 30 and again on December 31, 2014. Drew reported net income of £600,000 for the year. At December 31, 2017, the market price of Drew s ordinary shares was £30 per share. Instructions (a) Prepare the journal entries for Tuecke s Concrete for 2017, assuming Tuecke s cannot exercise significant influence over Drew. Use the cost method and assume Drew ordinary shares should be classified as non-trading. (b) Prepare the journal entries for Tuecke s Concrete for 2017, assuming Tuecke s can exercise significant influence over Drew. Use the equity method. (c) Indicate the statement of financial position and income statement account balances at December 31, 2017, under each method of accounting.

Apr 09 2020 Read more Less More

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