MATERI PRAKTIKUM AKUNTANSI KEUANGAN LANJUTAN FATA 2016

LAB 3
STOCK INVESTMENT

 
Accounting for Stock Investment

(Instrumen (Investasi (Laporan

Keuangan: pada entitas Keuangan
Pengakuan Asosiasi dan Konsolidasi)
dan Ventura
Pengukuran) Bersama)

 
 Significant Influence dibuktikan dengan satu atau lebih cara sebagai berikut:
1. Keterwakilan dalam dewan direksi
2. Partisipasi dalam proses pembuatan kebijakan’
3. Adanya transaksi material antara entitas dengan investee
4. Pertukaran personel manajerial
5. Penyedia informasi teknik pokok

 
Fair Value/Cost Method and Equity Method
Fair Value/Cost Method Equity Method
To record investment
Investment in Subsidiary xxx Investment in Subsidiary xxx
Cash Cash
xxx xxx
To record Dividend Received
Cash xxx Cash xxx
Dividend Income xxx Investment in Subsidiary xxx
To recognize earnings
Investment in Subsidiary xxx
No entry
Income from Subsidiary xxx

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 MATERI PRAKTIKUM AKUNTANSI KEUANGAN LANJUTAN FATA 2016
 
Example

In January 1, 2019, Jatos Corp purchase 30% of outstanding voting common stock of AA
Corp for $10,000,000 in cash. Jatos is member of AA Financial Committee. Below is the

Statement of Financial Position of PT AA Januari 1, 2019 (in $000) :
Book Value Fair Value
Cash 3,000 3,000
Receivable 4,400 4,400
Inventories (sold) 6,000 8,400
Prepaid insurance (disposed) 6,600 6,200
Equipment (20 years) 10,000 10,000
Total Asset 30,000 38,000
Account Payable 2,000 2,000
Notes Payable (due in 5 years)q 4,000 3,600
Common Stock 20,000
Retained Earnings 4,000
Total Liabilities and Equities 30,000

AA’s share dividend on August, 2 $1,000,000 and AA’s net income 2019 is $6,000,000

Required :
1. Schedule for allocating excess of cost over book value
2. Equity income calculation from 30% investment in AA
3. Investment balance calculation
4. All necessary journal entries

Solution :

1. Schedule for allocating excess of cost over book value (in $000)
Investment in AA Corp 10,000
BV of Interest acquired ((20,000+4,000) * 30%) 7,200
Total Excess of cost over BV 2,800

Assignment to identifiable net asset :

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MATERI PRAKTIKUM AKUNTANSI KEUANGAN LANJUTAN FATA 2016
Net Asset Excess FV BV % Amount
Allocated Acquired
Inventories Undervalued 8,400 6,000 720
Prepaid Overvalued (120)
6,200 - 6,600 × =
30%
Insurance
Notes Overvalued 120
3,600 4,000
Payable
Total assigned to net identifiable asset 720
Remainder assigned to goodwill 2,080
Total Excess of cost over book value acquired 2,800

2. Calculate equity income from 30% investment in AA Corp (in $000)

Equity in AA reported income (6.000 * 30%) 1,800
Amortization of excess cost over BV :
- Inventory (Sold) (720)
- Prepaid Insurance (disposed) 120
- Notes Payable (120/ 5 years) (24)
Total Investment income from AA Corp 1,176

3. Investment Balance (in $000)

Initial investment cost 10,000
Add : Income from AA 1,176
Less : Dividend received (1,000 * 30%) (300)
Investment in AA December 31, 2019 10,876

4. Journal Entries (in $000)

 To record investment in AA Corp
Investment in AA 10,000
Cash 10,000
 To record dividend (1000 * 30%)
Cash 300
Investment in AA 300

 To record income from AA Corp

Investment in AA 1,800

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MATERI PRAKTIKUM AKUNTANSI KEUANGAN LANJUTAN FATA 2016
Income from AA 1,800
 To record write off excess allocated inventory
Income from AA 720
Investment in AA 720

 To record credit overvalued prepaid insurance disposed

Investment in AA 120
Income from AA 120
 To record amortization of notes payable
Income from AA 24
Investment in AA 24

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