On January 1,2016,CC Company acquired 60,000 shares of RR Limited at $5 per share,representing 20% of RR's outstanding voting shares.On July 31,2016,RR declared and paid a dividend of $1 per share.RR's net income for 2016 was $2,800,000.On December 31,2016,the shares of RR were trading on the Toronto Stock Exchange at $16 per share.
Required:
Provide the journal entries on CC's books relating to its investment in RR,assuming that CC classifies RR as an associate.

Question

Quizplus · Accepted Answer

The Answer of On January 1,2016,CC Company acquired 60,000 shares of RR Limited at $5 per share,representing 20% of RR's outstanding voting shares.On July 31,2016,RR declared and paid a dividend of $1 per share.RR's net income for 2016 was $2,800,000.On December 31,2016,the shares of RR were trading on the Toronto Stock Exchange at $16 per share.
Required:
Provide the journal entries on CC's books relating to its investment in RR,assuming that CC classifies RR as an associate.

On January 1,2016,CC Company Acquired 60,000 Shares of RR Limited