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Path Company Has Decided to Distribute Shares It Owns in Trail

question 60

Essay

Path Company has decided to distribute shares it owns in Trail Ltd as a dividend to its shareholders.The investment in Trail is recorded in Path's books at a value of $2,500,000.On the date of declaration they had a market value of $3,125,000.
Required:
Prepare all the journal entries to record the declaration and payment of the dividend.


Definitions:

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected amount, which can indicate efficiency or waste.

Materials Price Variance

The difference between the actual cost of materials purchased and the expected cost, based on standard prices.

Labor Rate Variance

The difference between the actual cost of labor and the expected (or standard) cost, based on the hours worked.

Labor Rate Variance

A specific type of variance that measures the difference between the actual hourly wage paid to workers and the standard rate expected.

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