Eco Corporation 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 16Purchased 4,000 shares of Ontario Company stock at $26 per share.July 7Purchased 2,500 shares of Van Company stock at $51 per share.July 20Purchased 1,200 shares of Twinings Company stock at $18 per share.August 15Received an $1.00 per share cash dividend on the Ontario Company stock.August 28Sold 2,400 shares of Ontario Company stock at $29 per share.October 1Received a $3.10 per share cash dividend on the Van Company shares.December 15Received a $1.20 per share cash dividend on the remaining Ontario Company shares.December 31Received a $2.50 per share cash dividend on the Van Company shares. **Journal Entry Worksheet Example**1. **Purchase Transactions:** - **Ontario Company Stock:** Purchased 4,000 shares at $26 per share. - **Van Company Stock:** Purchased 2,500 shares at $51 per share. - **Twinings Company Stock:** Purchased 1,200 shares at $18 per share.2. **Dividend Transactions:** - **Ontario Company:** - Received a $1.00 per share cash dividend. - Later, received a $1.20 per share cash dividend on the remaining shares. - **Van Company:** - Received a $3.10 per share cash dividend. - Later, received a $2.50 per share cash dividend.3. **Sale Transactions:** - Sold 2,400 shares of Ontario Company stock at $29 per share.4. **Year-End Adjustments:** - Instructions to prepare an adjusting entry for the year-end fair value adjustment for the portfolio of short-term investments in available-for-sale securities.**General Ledger Account Overview:**- **Cash:** - Debit: Entry starting with $1,305,000.- **Accounts Receivable:** - Debit: Entry starting with $110,000.- **Inventory:** - Debit: Entry starting with $40,000.- **Accounts Payable:** - Credit: Entry starting with $70,000.- **Long-Term Notes Payable:** - Credit: Entry starting with $340,000.- **Common Stock:** - Credit: Entry starting with $385,000.- **Paid-in Capital in Excess of Par - Common:** - Credit: Entry starting with $110,000.- **Retained Earnings:** - Credit: Entry starting with $550,000.This guide outlines the journal entries for purchasing, receiving dividends, selling stocks, and adjusting year-end fair value of investments. It provides a comprehensive general ledger account snapshot for understanding the beginning balances of various accounts. **Accounting Adjustment and Transaction Analysis****Account Titles Overview:**- **Cash:** Debit $1,305,000- **Accounts Receivable:** Debit $110,000- **Inventory:** Debit $40,000- **Accounts Payable:** Credit $70,000- **Long-term Notes Payable:** Credit $340,000- **Common Stock:** Credit $365,000- **Paid-in Capital in Excess of Par - Common:** Credit $110,000- **Retained Earnings:** Credit $550,000**Total Debit/Credit:** $1,455,000---**Year-End Fair Value Analysis:**Calculate total cost and value of the available-for-sale portfolio and adjusting entries.**Cost of Investments at December 31:**1. **Ontario Company Stock:** 2. **Van Company Stock:** 3. **Twinings Company:** **Fair Value of Investments at December 31:**1. **Ontario Company Stock:** 2. **Van Company Stock:** 3. **Twinings Company:** **Total Unrealized Gain/Loss at December 31:****Steps to Calculate Adjustments:**1. Determine unadjusted balance.2. Determine adjusted balance.3. Calculate adjustment needed.---**Transaction Analysis Table:**For each transaction, indicate changes in total assets and total equity. Changes in equity are categorized as a component of net income or stockholders' equity.- **Apr 16:** Purchase of 4,000 shares of Ontario Company at $26 per share.- **Jul 7:** Purchase of 2,500 shares of Van Company at $51 per share.- **Jul 20:** Purchase of 1,200 shares of Twinings Company at $18 per share.- **Aug 15:** Received $1.10 per share cash dividend (Ontario).- **Aug 29:** Sold 2,400 shares of Ontario at $29 per share.- **Oct 1:** Received $1.70 per share dividend (Van).- **Dec 15:** Received $1.20 per share dividend (Ontario).- **Dec 31:** Received $2.50 per share dividend (Van).- **Dec 31:** Adjust investments to year-end fair value.**Change Details:**- **Total Assets:**- **Component of Net Income:**- **Stockholders' Equity:**- **Total Change in

A journal entry is a form of accounting entry that is used to report a business transaction in a company's accounting records.Part 1:Part 2: Workings:Part 3:

Answered: Eco Corporation had no short-term…

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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April 16	Purchased 4,000 shares of Ontario Company stock at $26 per share.
July 7	Purchased 2,500 shares of Van Company stock at $51 per share.
July 20	Purchased 1,200 shares of Twinings Company stock at $18 per share.
August 15	Received an $1.00 per share cash dividend on the Ontario Company stock.
August 28	Sold 2,400 shares of Ontario Company stock at $29 per share.
October 1	Received a $3.10 per share cash dividend on the Van Company shares.
December 15	Received a $1.20 per share cash dividend on the remaining Ontario Company shares.
December 31	Received a $2.50 per share cash dividend on the Van Company shares.