1. Record, in journal entry form, the following transactions, assuming thecompany plans on holding the investments for trading purposes:April 16 - Purchased 300 shares of Ameco for $25 per share.• May 2 - Purchased 1,000 shares of Rattle Inc. for $12.50 per share.• June 19 - Sold 100 Ameco shares for $32.75 per share.• October 7 - Purchased 550 shares of BMC for $27.80 per share.• November 30 - Received a dividend of $0.25 per share from Rattle.• December 12 - Sold half the shares in BMC for $21.00 per share.2. Record any required journal entries on December 31, the company'syear-end.

Investment in trading securities carries a debit balance, so debiting it further increases the…

Answered: 1. Record, in journal entry form, the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The investments of Charger Inc. include a single investment: 18,440 shares of Raiders Inc. common stock purchased on February 24, Year 1, for $37 per share including brokerage commission. These shares were classified as trading securities. As of the December 31, Year 1, balance sheet date, the share price had increased to $45 per share.Required:A. Journalize the entries to acquire the investment on February 24, and record the adjustment to fair value on December 31, Year 1. Refer to the Chart of Accounts for exact wording of account titles.B. How is the unrealized gain or loss for trading investments reported on the financial statements?
The investments of Charger Inc. include a single investment: 14,500 shares of Raiders Inc. common stock purchased on February 24, Year 1, for $38 per share including brokerage commission. These shares were classified as trading securities. As of the December 31,Year 1, balance sheet date, the share price had increased to $42 per share.a. Journalize the entries to acquire the investment on February 24 and record the adjustment to fair value on December 31, Year 1.b. How is the unrealized gain or loss for trading investments reported on the financial statements?
Prepare journal entries to record the following investment-related transactions of a company for its first year of operations: On May 4, the company purchased 600 shares of Orbital Company Stock at $140 per share as a short-term investment in an available-for-sale security. On July 1, received a $2.50 per share cash dividend on the Orbital Company stock purchased in transaction (a). On September 15, sold 250 shares of Orbital Company stock purchased in transaction (a) for $85 per share On October 15, sold 100 shares of Orbital Company stock purchased in transaction (a) for $185 per share
Prepare journal entries to record the following transactions involving the short-term stock investments of Duke Co., all of which occurred during the current year. a. On March 22, purchased 1,000 shares of RPI Company stock at $10 per share. Duke’s stock investment results in it having an insignificant influence over RPI. b. On July 1, received a $1 per share cash dividend on the RPI stock purchased in part a. c. On October 8, sold 50 shares of RPI stock for $15 per share.
Journalize the entries to record the following selected equity investment transactions completed by Perry Company during the current year. Perry accounts for this investment using the cost method. Feb. 2 Purchased for cash 900 shares of Dexter Co. stock for $54 per share plus a $450 brokerage commission. This represents a less than 10% ownership interest in the company. Apr. 16 Received dividends of $0.25 per share on Dexter Co. stock. June 17 Sold 200 shares of Dexter Co. stock for $70 per share less a $500 brokerage commission. Aug. 19 Purchased 600 shares of Dexter Co. stock for $65 per share plus a $300 brokerage commission. Nov. 14 Received dividends of $0.30 per share on Dexter Co. stock. If an amount box does not require an entry, leave it blank. Feb. 2 fill in the blank 2 fill in the blank 4 Apr. 16 fill in the blank 6 fill in the blank 8 June 17 fill in the blank 10 fill in the blank 11 fill in the blank 13 fill in the…
The investments of Steelers Inc. include a single investment: 33,100 shares of Bengals Inc. common stock purchased on September 12, Year 1, for $13 per share including brokerage commission. These shares were classified as available-for-sale securities. As of the December 31, Year 1, balance sheet date, the share price declined to $11 per share.a. Journalize the entries to acquire the investment on September 12 and record the adjustment to fair value on December 31, Year 1.b. How is the unrealized gain or loss for available-for-sale investments disclosed on the financial statements?
Journalize the entries to record the following selected equity investment transactions completed by Perry Company during the current year. Perry accounts for this investment using the cost method. Feb. 2 Purchased for cash 900 shares of Dexter Co. stock for $54 per share plus a $450 brokerage commission. This represents a less than 10% ownership interest in the company. Apr. 16 Received dividends of $0.25 per share on Dexter Co. stock. June 17 Sold 200 shares of Dexter Co. stock for $70 per share less a $500 brokerage commission. Aug. 19 Purchased 600 shares of Dexter Co. stock for $65 per share plus a $300 brokerage commission. Nov. 14 Received dividends of $0.30 per share on Dexter Co. stock.
Diann Ltd. had the following transactions pertaining to share investments. Feb. 1 Purchased 600 ordinary shares of Ronn (2%) for $6,200. July 1 Received cash dividends of $1 per share on Ronn ordinary shares. Sept. 1 Sold 300 ordinary shares of Ronn for $4,300. Dec. 1 Received cash dividends of $1 per share on Ronn ordinary shares. Instructions: a. Journalize the transactions. b. Explain how dividend revenue and the gain (loss) on sale should be reported in the income statement.
The investments of Steelers Inc. include a single investment: 33,100 shares of Bengals Inc. common stock purchased on September 12, Year 1, for $13 per share including brokerage commission. These shares were classified as available-for-sale securities. As of the December 31st, Year 1, balance sheet date, the share price declined to $11 per share. a. Journalize the entries to acquire the invesmtent on September 12 and record the adjustment to fair value on December 31, Year 1. b. How is the unrealized gain or loss for avaialble-for-sale investments disclosed on the financial statements?
The securities owned by Jane Company were held as a long-term investment. During the currentyear, the following transactions occurred:Jan. 1 Purchased 15,000 shares of ABC Company at P70 per share.May 1 Purchased 8,000 shares of XYZ Corporation for P660,000.Apr 1 Received a cash dividend of P6 per share from ABC Company.July 1 Received a share for a share dividend from XYZ Corporation.Aug 1 Purchased 10,000 shares of GHI Enterprises at P75 each.Oct 1 Received a cash dividend of P6 per share from ABC Company.Oct 31 XYZ Corporation offered shareholders rights to subscribe to one new share for every tenrights tendered at P25. At the time of issuance, the market value of the right is P4. Sharerights are not accounted for separately.Nov 15 Exercised the XYZ Corporation’s share rights.Dec. 1 Sold 10,000 shares of XYZ Corporation at P35 per share. Use the FIFO approach indetermining the cost of the shares sold.Dec. 31 The fair values of the portfolio is as follows:ABC Company – P73 per…
The securities owned by Jane Company were held as a long-term investment. During the currentyear, the following transactions occurred:Jan. 1 Purchased 15,000 shares of ABC Company at P70 per share.May 1 Purchased 8,000 shares of XYZ Corporation for P660,000.Apr 1 Received a cash dividend of P6 per share from ABC Company.July 1 Received a share for a share dividend from XYZ Corporation.Aug 1 Purchased 10,000 shares of GHI Enterprises at P75 each.Oct 1 Received a cash dividend of P6 per share from ABC Company.Oct 31 XYZ Corporation offered shareholders rights to subscribe to one new share for every tenrights tendered at P25. At the time of issuance, the market value of the right is P4. Sharerights are not accounted for separately.Nov 15 Exercised the XYZ Corporation’s share rights.Dec. 1 Sold 10,000 shares of XYZ Corporation at P35 per share. Use the FIFO approach indetermining the cost of the shares sold.Dec. 31 The fair values of the portfolio is as follows:ABC Company – P73 per…
Chowking Company engaged in the following investment transactions during the current year: February 1 Purchased 5,000 ordinary shares of ZZZ Company for P200 per share plus a brokerage commission of P50,000. These shares are classified as trading securities. June 25 Received P120 per share dividend on ZZZ Company shares. October 1 Purchased 20,000 shares of XXX Company for P150 per share plus brokerage fee of P100,000. These shares are designated at FVOCI. December 31 Received P50 per share dividend on XXX Company shares. 31 ZZZ Company shares are selling for P250 and XXX shares are selling for P180. What net amount of income should be reported for the current year?

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS