On January 1, 2021, Montgomery Engine Corporation Paid $ 410,000

question 199

Essay

On January 1, 2021, Montgomery Engine Corporation paid $ 410,000 to purchase 25% of the outstanding voting shares of Joyce Global Corporation. Montgomery Engine applies IFRS and therefore the equity method is used to account for the investment. The following data relate to this investment.
2021
- Dividends received from Joyce Global amounted to $ 25,000.
- Net income reported by Joyce Global was $ 250,000.
- Current market value of Joyce Global investment on December 31, 2021, was $ 365,000.
2022
- Dividends received from Joyce Global amounted to $ 25,000.
- Net income reported by Joyce Global was $ 295,000.
- Current market value of Joyce Global investment on December 31, 2022, was $ 430,000.
Instructions
Prepare all journal entries for 2021 and 2022 relating to Montgomery Engine Corporation's investment in Joyce Global Corporation.

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Definitions:

Operations Plan

A detailed plan outlining the day-to-day activities necessary for running a business, including production, inventory, and distribution strategies.

Lower Prices

Reduced costs of goods or services offered to consumers, often used as a strategy to increase demand or market share.

Market Share

The portion of a market controlled by a particular company, expressed as a percentage of total sales in the industry.

New Customers

Individuals or entities that have recently started purchasing goods or services from a business.