21. A partial list of investment activities for Honda Inc. during YR01 and YR02 appears...
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Accounting
21. A partial list of investment activities for Honda Inc. during YR01 and YR02 appears below.
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Prepare formal journal entries to record these events and any necessary adjusting journal entries in YR01 and YR02. For this problem calculate journal entry amounts to the nearest dollar.
| April 1, YR02 | Purchased 120 common shares of Ford Co. common stock. Paid $20 per share and a brokers fee of $60. Ford Co. currently has 400 common shares outstanding, and this purchase gives Honda the ability to influence the operating activities of Ford Co. At the purchase date, the book value per common share for Ford Co. is $14.50. The difference between price paid and book value per common share for the Ford Co. stock is related to the following: (1) 50% of the difference relates to equipment with a remaining life of 5 years, (2) 25% relates to land, and (3) 25% relates to internally developed goodwill. |
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