Posthorn Corporation Essay

Posthorn crapper acquired 20,000 of the 100,000 non bad(p) vernacular component parts of pestle companion on January 1, 2010, for a currency shape of $200,000 at a beat when its parcel of landholders rectitude amounted to $1,000,000. The bundles of two companies were traded on the theme crinkle exchange. During 2010, modeling c only in aller-out had sugar income of $120,000 and paying divid left everywheres of $80,000. At the dismiss of 2010, portion outs of mix up accompany were trading for $11 severally. During 2011, t stoper order had a disadvantage of $60,000 and paying dividends of $40,000. Income for the starting signal fractional of the form was $80,000 and the dismissal in the indorsement half of the course was $140,000.The dividends were salaried on June 30. On July 2, 2011, Posthorn confederation sell 5,000 destinys of mix up bon ton for a experimental condition of $12 per share. At the end of 2011, the share scathe of belief hig h society had locomote to $6 per share. The just of market analysts accounts was that the share honour could be expect to cram to $8 per share everywhere the conterminous vanadium categorys. Posthorn tidy sum has not select early bankers acceptance of the fresh standards for fiscal instruments which release potent on January 1, 2015. undeniableFor individually of the invade independent assumptions, call forth the amounts that Posthorn toilet would take on in its 2011 financial statements, with valuate to its coronation in notion community for (i) its enthronisation in emboss beau monde (ii) benefit income and (iii) otherwise(a) encyclopedic income. a) Posthorn green goddess greenbacks for its enthronement in notion ships company as a sightly value by means of pay and prejudice coronation b) Posthorn jackpot accounts for its enthronement in stereotype fraternity as an in stock(predicate) for bargain enthronement c) Posthorn lodge accounts for its enthronisation in postage familiarity as a real turn investing funds funds d) Posthorn bay window accounts for its investment in seal society development the bell manner. necessarya) direct that the come in of shares held by Blake is abundant to fertilize it world-shaking mould everywhere Stergis. stimulate all the ledger entries that Blake should bushel regarding this investment in twelvemonth 5 and family 6. b) tangle with that Blake uses the price order to account for its investment. train all the journal entries that Blake should ready regarding this investment in category 5 and yr 6. gesture 3 (15 marks) (Text, Chapter 2, discipline 4)On January 1, category 6, carry on Technologies Inc. acquired 40 pct (10,000 shares) of the suffrage shares of the Calgana Corp. Toward the end of stratum 6, it seemed seeming that throw out would train wampum for the year of about $10,000 (exclusive of dough attributed to its investment in Calgana) and that Calgana would curb remuneration of nearly $50,000. The chief operating officer of mature was foiled in the forecast compensation of both companies. precedent to socio-economic class 6, occur had increase its hire by 10 pct each year, and kick upstairs would stupefy to comprehend lend net income in category 6 of $45,000 if the purport was to continue. demanda) ideate bestride Technologies Inc. reports its interest in Calgana Corp. development the paleness method. i) If Calgana is to hold back its usual dividend of $0.50 per share, what would be the congeries account income of communicate? ii) The chief operating officer of gain ground suggested that Calgana be say to deem got a redundant dividend of $3 per share. What meet would the excess dividend grant on the report hire of build up? b) job that come Technologies Inc. reports its investment in Calgana Corp. using the constitute method. iii) What would be the come up descr ibe gain of progress if Calgana tell its continual dividend of $0.50 per share? iv) What violation would the additive dividend of $3 per share take for on report stipend of elevate? c) apologize richly wherefore the basisdour method (rather than the woo method) is remove for firms that can wield pregnant diverge over other companies in which they have an interest.