On January 1, 2016, Black Corporation purchased 15 per cent of the outstanding shares of White Corporation for $498,000. From Black's perspective, White was a FVTPL investment. The fair value of Black's investment was $520,000 at December 31, 2016.
On January 1, 2017, Black purchased an additional 30 per cent of White's shares for $1,040,000. The second share purchase allows Black to exert significant influence over White.
During the two years White reported the following results: $\begin{array}{|l|l|l|}
\hline& \text { Profits } & \text { Dwidends } \
\hline 2016 & 400,000 & 240,000 \
\hline 2017 & 540,000 & 250,000 \
\hline
\end{array}$ Required:
With respect to this investment, prepare Black's journal entries for both 2016 and 2017.

Question

On January 1, 2016, Black Corporation purchased 15 per cent of the outstanding shares of White Corporation for $498,000. From Black's perspective, White was a FVTPL investment. The fair value of Black's investment was $520,000 at December 31, 2016.
On January 1, 2017, Black purchased an additional 30 per cent of White's shares for $1,040,000. The second share purchase allows Black to exert significant influence over White.
During the two years White reported the following results: $\begin{array}{|l|l|l|} 
\hline& \text { Profits } & \text { Dwidends } \
\hline 2016 & 400,000 & 240,000 \
\hline 2017 & 540,000 & 250,000 \
\hline
\end{array}$ Required:
With respect to this investment, prepare Black's journal entries for both 2016 and 2017.

Quizplus · Accepted Answer

The Answer of On January 1, 2016, Black Corporation purchased 15 per cent of the outstanding shares of White Corporation for $498,000. From Black's perspective, White was a FVTPL investment. The fair value of Black's investment was $520,000 at December 31, 2016.
On January 1, 2017, Black purchased an additional 30 per cent of White's shares for $1,040,000. The second share purchase allows Black to exert significant influence over White.
During the two years White reported the following results: $\begin{array}{|l|l|l|} 
\hline& \text { Profits } & \text { Dwidends } \
\hline 2016 & 400,000 & 240,000 \
\hline 2017 & 540,000 & 250,000 \
\hline
\end{array}$ Required:
With respect to this investment, prepare Black's journal entries for both 2016 and 2017.

On January 1, 2016, Black Corporation Purchased 15 Per Cent