Cheyenne Inc acquired 122,000 common shares, which is 25% of the outstanding common shares, of...
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Cheyenne Inc acquired 122,000 common shares, which is 25% of the outstanding common shares, of Tahiti Ltd. on January 1, 2017 for $780,800. At the time of purchase, Tahiti Ltd. depreciable assets were undervalued by $35,520. The depreciable assets had a remaining useful life of 8 years with no salvage value. Tahiti Ltd. declared and paid a cash dividend of $0.36 per share on July 31, 2017. Tahiti Ltd. reported $1.2 million as net income on December 31, 2017 for the year ending on this date. Assuming that Cheyenne Inc. is in a position to exercise significant influence over Tahiti Ltd, and that Cheyenne follows IFRS. Prepare all the journal entries for 2017 in the books of Cheyenne Inc. relating to above transactions.
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