Homework Answers
| Answer to i) | |||
| S. No. | Account Title and Explanations | Debit | Credit |
| (a) | Investment in Sun Software | 10,00,000 | |
| Cash | 10,00,000 | ||
| (Being purchase of 25% share of Sun) | |||
| (b) | Investment in Sun Software | 1,60,000 | |
| Investment income | 1,60,000 | ||
| (Being portion of Sun software's net income) | |||
| (c) | Cash | 1,05,000 | |
| Investment in Sun Software | 1,05,000 | ||
| (Being receipt of cash divdend from Sun Software) |
| Answer to ii) | |
| Calculation of ending balance in Microsoft's investment account | |
| Particulars | Amount ($) |
| Purchase price of investment | 10,00,000 |
| Add: Portion of Sun software's net income | 1,60,000 |
| Less: Cash dividend | -1,05,000 |
| Ending balance in Microsoft's investment account | 10,55,000 |
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