1. Classify each of the investments made during 2024. (Assume the equityinvestments represent less than 20% of ownership of outstandingvoting stock.)2. Journalize the 2024 transactions. Explanations are not required.3. Prepare T-accounts for the investment assets, and show how to report theinvestments on Delivery Dream's balance sheet at December 31, 2024.4. Where is the unrealized holding gain or loss associated with the trading debtinvestment reported? 2024Jul. 2Purchased 3,500 shares of Luma, Inc. common stock at $12.00 per share.Delivery Dream plans to sell the stock within three months, when the companywill need the cash for normal operations. Delivery Dream does not havesignificant influence over Luma.Aug. 21Received a cash dividend of $0.20 per share on the Luma stock investment.Sep. 16Sold the Luma stock for $14.90 per share.Oct. 1Purchased a Volt bond for $22,000 at face value. Delivery Dream classifiesthe investment as trading and short-term.Dec. 31Received a $140 interest payment from Volt.Dec. 31Adjusted the Volt bond to its market value of $25,000.

GIVEN Jul. 2 Purchased 3,500 shares of Luma, Inc. common stock at $12.00 per share. Delivery…

Answered: 2024 Jul. 2 Purchased 3,500 shares of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On August 1, Shamrock Finance Inc. buys 2,500 Datawave common shares for trading purposes for $95,000 cash. On October 15, Shamrock receives a cash dividend of $2.35 per share from Datawave. On December 1, Shamrock sells the shares for $100,000 cash. Prepare the journal entry to record the purchase of the shares. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Aug. 1 Investment in Associate Cash (To record purchase of investment.) Date Account Titles and Explanation Oct. 15 Prepare the journal entry to record the receipt of the dividend. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Cash Gain on Fair Value Adjustment-FVTPL (Collection of dividend.) Dec.…
During the fourthquarter of 2018, Rainbarrel, Inc. generated excess cash, which the company invested in equitysecurities as follows:Nov 16 Purchased 1,200 common shares as an investment in equity securities,paying $6 per share. Rainbarrel owns less than 10% of the outstandingstock in the companies in which it invests.Dec 16 Received cash dividend of $0.35 per share on the equity securities.Dec 31 Adjusted the equity securities to fair value of $4 per share.2018Requirements1. Open T-accounts for Cash (including its beginning balance of $23,000), Investment inEquity Securities, Dividend Revenue, and Unrealized Gain (Loss) on Equity Securities.2. Journalize the foregoing transactions and post to the T-accounts.3. Show how to report the short-term investment on Rainbarrel’s balance sheet atDecember 31, 2018.4. Show how to report whatever should appear on Rainbarrel’s income statement for the yearended December 31, 2018.5. Rainbarrel sold the equity securities for $6,000 on January 14,…
Assume that Echoing Green, featured in this chapter’s opener, makes an investment in Sustain Inc., a sustainability consulting firm. The company purchases 200 shares of Sustain stock for $15,000 cash plus a broker’s fee of $500 cash. Sustain has 500 shares of common stock outstanding, and Echoing Green will be able to significantly influence its policies. Required 1. Prepare the journal entry to record the investment in Sustain on January 1. 2. Sustain declares and pays a dividend of $1,000. Prepare the journal entry to record Echoing Green’s receipt of its share of the dividend on July 1. 3. Sustain reports net income of $5,000. Prepare the journal entry to record Echoing Green’s share of those earnings on December 31.
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The Tornado Truck Body Company decides to repurchase 10,000 shares of its common stock on January 20. The stock has $1 par value, and the market value per share of common stock on January 20 is $8.75. The company decides to sell 5,000 of the treasury stock shares on April 30 for $9.00 per share. What is the amount of the gain recognized as a result of the transaction? Group of answer choices A)$40,000 b)$0 c)$45,000 d)$1,250 e)None of the above
Midwest Bank invests in equity securities. At the beginning of December 2019, the bank held no equity securities. During December of 2019, it entered into the following transactions: Dec. 10 Purchased 400 shares of Carroll Company common stock for $75 per share. 21 Purchased 700 shares of Dynamo Company common stock for $30 per share. At the end of December, the Carroll Company common stock had a quoted market price of $79 per share, and the Dynamo Company common stock had a quoted market price of $33 per share. Question Journal entries to record the preceding information (pay attention to dates) would include: Credit to Cash of $51,000 Credit to Unrealized Holding Gains/Losses - Equity Investments of $3,700 Credit to Equity Investments of $30,000 Credit to Fair Value Adjustment - Equity Investments of $3,700
Rose Company had no short-term investments prior to this year. It had the following transactions this year involving short- term stock investments with insignificant influence. April 16 Purchased 3,500 shares of Gem Company stock at $24 per share. July 7 Purchased 2,000 shares of PepsiCo stock at $49 per share. Purchased 1,000 shares of Xerox stock at $16 per share. July 20 August 15 Received a $1.00 per share cash dividend on the Gem Company stock. August 28 Sold 2,000 shares of Gem Company stock at $30 per share. share cash dividend on the PepsiCo shares. October 1 Received a $2.50 per December 15 Received a $1.00 per share cash dividend on the remaining Gem Company shares. December 31 Received a $1.50 per share cash dividend on the PepsiCo shares. The year-end fair values per share are Gem Company, $26; PepsiCo, $46; and Xerox, $13. 2. Prepare a table to compare the year-end cost and fair values of Rose's short-term stock investments. Comparison of Cost and Fair Values for Stock…
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Rose Company had no-short investments prior to this year. It had the following transactions this year involving short-term stock investments with insignificant influence. April 16 Purchased 3,500 shares of Gem Company stock at $24 per share. July 7 Purchased 2,000 shares of PepsiCo stock at $49 per share. July 20 Purchased 1,000 shares of Xerox stock at $16 per share. August 15 Received a $1.00 per share cash dividend on the PepsiCo shares. August 28 Sold 2,000 shares of Gem Company stock at $30 per share. October 1 Received a $2.50 per share cash dividend on the PepsiCo shares. December 15 Received a $1.00 per share cash dividend on the remaining Gem Company shares. December 31 Received a $1.50 per share cash dividend on the pepsi shares. The year-end fair values per share are Gem Company, $26; PepsiCo, $46; and Xerox, $13. Prepare the current asset section of the balance sheet for the fair value adjustment for Rose's short-term investments. Note: Amounts to be deducted should be…
ABC Financial Services Inc. invested $15,000 to acquire 3,750 shares of EDFInvestments Inc. on March 15, 2012. This investment represents less thun 20% of the investee's voting stock. On May 7, 2016, ABC Financial Services Inc. sells 1,950 shares for $11,050. Which of the following will be the correct journal entry for this transaction?Introduction to Fir29:01 Finlnswer SheetA. Cash$ 11,050 Loss on Disposal$ 3,950Investments$ 15,000B. Cash$ 11,050Investment$ 7,800Gain on Disposal$ 3,250C. Cash$ 11,050Investments$ 11,050D. Gain on Disposal$ 11,050Investments$ 11,050
↑ 3 minutes ago ☆ Live Large Inc. had the following transactions involving non-strategic investments during 2023. 2023 Apr. 1 Paid $100,ese to buy a 90-day term deposit, $100,000 principal amount, 5.0%, dated April 1. There was a $50 transaction fee included in the above-noted payment amount. 12 Purchased 3,000 common shares of Blue Balloon Ltd. at $22.25. There was a $50 transaction fee included in the above-noted payment amount. June 9 Purchased 1,800 common shares of Purple Car Corp. at $49.50. There was a $50 transaction fee included in the above-noted payment amount. 20 Purchased 700 common shares of Yellow Tech Ltd. at $15.75. There was a $50 transaction fee included in the above-noted payment amount. July 1 Purchased for $67,412 a 7.0%, $65,000 Space Explore Inc. bond that matures in eight years when the market interest rate was 6.4%. There was a $50 transaction fee included in the above-noted payment amount. Interest is paid semiannually beginning December 31, 2023. Live Large…

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