Chapter 9
Investments
453
AP-15A
(
3
)
Raj Company had the following activities in relation to its investments in 2016. The company
follows IFRS with June 30 as its year-end.
1) On January 1, 2016, Raj purchased 25,000 (or 25%) common shares from Terry Company
for $960,000.
2) On March 31, 2016, Raj Company’s accountant received financial statements from Terry
Company, which reported a net profit of $386,000 for the year ending February 28, 2016.
3) On April 30, 2016, Raj Company received cash dividends from Terry Company of $1.10 per
share.
4) On June 30, 2016, Raj Company’s year-end, Terry Company’s shares were traded at $39.20
per share.
Required
a) Prepare journal entries to record the above activities assuming significant influence is
not
achieved.
Date
Account Title and Explanation
Debit
Credit
