Accountıng Iı Deneme Sınavı Sorusu #1040596
On 7 February, 2019 Anadolu Co. paid 150,000 TL including brokerage commissions, taxes and other fees and bought 20% of AOF Corporation. On December 31, AOF Corp. has reported 250,000 TL net income for 2019.
Which of the following is the required entry in balance sheet of Anadolu Co. on December 31?
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Debit: Affiliates - 50,000 Credit: Revenue from Affiliates - 50,000 |
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Debit: Cash - 50,000 Credit: Affiliates - 50,000 |
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Debit: Cash - 30,000 Credit: Affiliates - 30,000 |
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Debit: Affiliates - 30,000 Credit: Cash - 30,000 |
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Debit: Affiliates - 150,000 Credit: Cash - 150,000 |
Income statement of AOF Corp. (investee) represents 250,000 TL net income for 2019, meaning an increase in equity by 250,000 TL. Since Anadolu Co. owns 20% of AOF Corp., the value of affiliate account in balance sheet of Anadolu Co. has also increased by 50,000 TL (20% x 250,000 TL). Then, the required entry is:
Debit: Affiliates - 30,000
Credit: Revenue from Affiliates - 30,000
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