Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
5th Edition
ISBN: 9780134078939
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
bartleby

Videos

Textbook Question
Book Icon
Chapter 10, Problem 10.22BP

Accounting for stock investments

The beginning balance sheet of Water Source Co. included a $800,000 investment in Larsen stock (35% ownership).

During the year, Water Source completed the following investment transactions:

Mar. 3 Purchased 6,000 shares at $7 per share of Jack Software common stock as a long-term, available-for-sale investment, representing 3% ownership.
May 15 Received a cash dividend of $0.53 per share on the Jack investment.
Dec. 15 Received a cash dividend of $1 10,000 from Larsen investment.
31 Received Larsen's annual report showing $110,000 of net income.
31 Received Jack's annual report showing $600,000 of net income for the year.
31 Larsen's stock fair value at year-end was $728,500.
31 Jack's common stock fair value at year-end was $10 per share.

Requirements

1. Journalize the transactions for the year of Water Source.

2. Post transactions to T-accounts to determine the December 31, 2016, balances related to the investment and investment income accounts.

3. Prepare Water Source's partial balance sheet at December 31, 2016, from your answers in Requirement 2.

Blurred answer
Students have asked these similar questions
The following equity investment transactions were completed by Vintage Company during a recent year: Apr. 10. Purchased 2,300 shares of Delew Company’s common stock for a price of $49.85 per share plus a brokerage commission of $345. Delew Company has 260,000 shares of common stock outstanding. July 8. Received a quarterly dividend of $0.25 per share on the Delew Company investment. Sept. 10. Sold 1,500 shares for a price of $45 per share less a brokerage commission of $190. Dec. 31. At the end of the accounting period, the fair value of the remaining 800 shares of Delew Company’s stock was $49.50 per share. Journalize the entries for these transactions. If an amount box does not require an entry, leave it blank. If required, round the final answers to the nearest dollar.   Apr. 10 - Purchase   Investments-Delew Company Stock       Cash   July 8 - Dividend   Cash       Dividend Revenue   Sept. 10 - Sale   Cash       Loss on Sale of Investments…
The following equity investment transactions were completed by Romero Company during a recent year: Apr. 10. Purchased 2,800 shares of Dixon Company for a price of $61.5 per share plus a brokerage commission of $1,400. July 8. Received a quarterly dividend of $0.7 per share on the Dixon Company investment. Sept. 10. Sold 1,900 shares for a price of $55 per share less a brokerage commission of $780. Journalize the entries for these transactions. If required, round the final answers to the nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank. Apr. 10 - Purchase   July 8 - Dividend   Sept. 10 - Sale
The following equity investment transactions were completed by Vintage Company during a recent year:   Apr. 10 Purchased 4,000 shares of Delew Company’s common stock for a price of $52 per share plus a brokerage commission of $105. Delew Company has 240,000 shares of common stock outstanding. July 8 Received a quarterly dividend of $0.50 per share on the Delew Company investment. Sept. 10 Sold 1,200 shares for a price of $42 per share less a brokerage commission of $90. Dec. 31 At the end of the accounting period, the fair value of the remaining 2,800 shares of Delew Company’s stock was $51.53 per share. Required:   Journalize the entries for these transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.…

Chapter 10 Solutions

Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)

Ch. 10 - What is a debt security?Ch. 10 - Prob. 2RQCh. 10 - Prob. 3RQCh. 10 - Briefly describe the five specific types of debt...Ch. 10 - How is the purchase of a held-to-maturity debt...Ch. 10 - Prob. 6RQCh. 10 - What method is used for investments in equity...Ch. 10 - What method is used for investments in equity...Ch. 10 - What adjustment must be made at the end of the...Ch. 10 - Where on the financial statements is an unrealized...Ch. 10 - Prob. 11RQCh. 10 - Prob. 12RQCh. 10 - Prob. 13RQCh. 10 - What does the rate of return on total assets...Ch. 10 - Identifying why companies invest and classifying...Ch. 10 - Prob. 10.2SECh. 10 - Prob. 10.3SECh. 10 - Accounting for equity method On January 1, 2016,...Ch. 10 - Accounting for trading investments On February 1,...Ch. 10 - Prob. 10.6SECh. 10 - Computing rate of return on total assets Kabra's...Ch. 10 - Prob. 10.8ECh. 10 - Prob. 10.9ECh. 10 - Accounting for bond investments Otter Creek Co....Ch. 10 - Accounting for stock investments Dollar Bill...Ch. 10 - Prob. 10.12ECh. 10 - Prob. 10.13ECh. 10 - Accounting for stock investments Suppose that on...Ch. 10 - Prob. 10.15ECh. 10 - Prob. 10.16ECh. 10 - A Accounting for bond investments Suppose Jenner...Ch. 10 - Prob. 10.18APCh. 10 - Accounting for stock investments The beginning...Ch. 10 - Accounting for bond investments Suppose Ritter...Ch. 10 - Classifying and accounting for stock investments...Ch. 10 - Accounting for stock investments The beginning...Ch. 10 - Prob. 10.23CPCh. 10 - Prob. 10.1CTEICh. 10 - Wild Adventure conducts tours of wildlife reserves...Ch. 10 - Prob. 10.1CTFSCCh. 10 - Prob. 10.1CTTPCh. 10 - In 150 words or fewer, explain the difference...
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
Text book image
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Text book image
Corporate Financial Accounting
Accounting
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Text book image
Accounting (Text Only)
Accounting
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Text book image
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Dividend explained; Author: The Finance Storyteller;https://www.youtube.com/watch?v=Wy7R-Gqfb6c;License: Standard Youtube License