Derr Co. purchases stock investments (with insignificant influence) at a cost of $250 on December 15. This is its first and only purchase of such securities. On December 28, Derr received a $15 cash dividend from the stock investments. At year-end December 31, the stock investments had a fair value of $200. a. Prepare the December 15 purchase entry for stock investments. b. Prepare the December 28 receipt of cash dividends entry. c. Prepare the December 31 year-end adjusting entry for the stock investments’ portfolio. d. Explain how each account in entry c is reported in financial statements. e. Prepare the January 3 entry when a portion of its stock investments (that had cost $37) is sold for $40.
Derr Co. purchases stock investments (with insignificant influence) at a cost of $250 on December 15.
This is its first and only purchase of such securities. On December 28, Derr received a $15 cash dividend
from the stock investments. At year-end December 31, the stock investments had a fair value of $200.
a. Prepare the December 15 purchase entry for stock investments.
b. Prepare the December 28 receipt of cash dividends entry.
c. Prepare the December 31 year-end
d. Explain how each account in entry c is reported in financial statements.
e. Prepare the January 3 entry when a portion of its stock investments (that had cost $37) is sold for $40.
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