BUSINESS COMBINATION ACCOUNTING

ASSIGNMENT 1: Accounting for small investment in Equity

Oct. 1, 2019, Maurice, Co. purchased 1,000 shares of Olive Co @$5. Olive has 10,000
outstanding shares. Maurice paid broker’s fee 2%.
Nov.25, 2019, Olive paid cash dividend total $800.
Dec. 1, 2019, 400 shares was sold @$5.80. Broker’s fee 2%
Dec 31, 2019 (Ending accounting period), Olive’s share traded @6.
Feb 10, 2020, Maurice sold all of its investment in Olive’s share @5.70. Broker’s fee 2%.

Prepare Journal entries using following assumptions;

1. The securities are classified as Trading Securities.

2. The securities are classified as Available for Sale Securities and choose to apply the
option to use Other Comprehensive income