A Boca Raton Company, Purchased $35,000 shares of common stock of Polo for (Long-Term) Investment $...

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Accounting

A Boca Raton Company, Purchased $35,000 shares of common stockof Polo for (Long-Term) Investment $ 700,000 during the year forPolo Corp. Corp reported net income of $300,000 and paid $100,000of dividends.
a.) assuming that $ 35,000 shares represent a 10% interest inthe Polo Corp.
b.) Prepare what entries in Acct. that Boca Raton Company shouldmake for it's in Investment Polo Stock that Year.
C.) What is the balance of stock accounts for Polo Investment onPolo Company's Books for that Year.
2. Assuming that the 35,000 Shares represent 20% of Interest inPolo Corp.
a.) Prepare the Journal Entry to reflect the entry in Polostock.
b,) Prepare what entries in Acct. that Boca Raton Company shouldmake for it's in Investment Polo Stock that Year.
c.) What is the balance of stock accounts for Polo Investment onPolo Company's Books for that Year.

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4.3 Ratings (649 Votes)

1a As Boca Raton Company holds only 10 of the shares of Polo the cost method of accounting would be following for available for sale investments In the books of Boca Raton Company Account Titles Debit Credit bi Long Term Investments See Answer

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