Chapter 9
Investments
473
AP-15B (
3
)
Shaw 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, Shaw Company purchased 35,000 (or 35%) common shares from Tang
Company for $859,950.
2) On March 31, 2016, Shaw Company’s accountant received financial statements from Tang
Company, which reported a net loss of $560,000 for the year ending February 28, 2016.
3) On April 30, 2016, Shaw Company received cash dividends from Tang Company of $0.05
per share.
4) On June 30, 2016, Tang Company’s shares were traded at $25.25 per share.
Required
a) Prepare journal entries to record the above activities assuming significant influence is
achieved.
Date
Account Title and Explanation
Debit
Credit
