Gator Shoes, Incorporated, manufactures a line of stylish waterproof footwear. The following transactions relate to investments in common stock during 2024. March 1 Purchases 1,600 shares (10%) of Power Drive Corporation's common stock for $48 per share. July 1 Receives a cash dividend of $1.70 per share. December 31 The fair value of Power Drive Corporation's common stock is $61 per share. On February 1, 2025 (the following year), Gator Shoes sells 400 shares of Power Drive Corporation's common stock for $66 per share. Required: 1. How will each of these transactions in 2024, including an adjustment on December 31 for the investment's fair value, affect the financial statements? 2. How will the sale on February 1, 2025, affect the financial statements?
Gator Shoes, Incorporated, manufactures a line of stylish waterproof footwear. The following transactions relate to investments in common stock during 2024. March 1 Purchases 1,600 shares (10%) of Power Drive Corporation's common stock for $48 per share. July 1 Receives a cash dividend of $1.70 per share. December 31 The fair value of Power Drive Corporation's common stock is $61 per share. On February 1, 2025 (the following year), Gator Shoes sells 400 shares of Power Drive Corporation's common stock for $66 per share. Required: 1. How will each of these transactions in 2024, including an adjustment on December 31 for the investment's fair value, affect the financial statements? 2. How will the sale on February 1, 2025, affect the financial statements?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Gator Shoes, Incorporated, manufactures a line of stylish waterproof footwear. The following transactions relate to investments in
common stock during 2024.
March 1 Purchases 1,600 shares (10%) of Power Drive Corporation's common stock for $48 per share.
July 1 Receives a cash dividend of $1.70 per share.
December 31 The fair value of Power Drive Corporation's common stock is $61 per share.
On February 1, 2025 (the following year), Gator Shoes sells 400 shares of Power Drive Corporation's common stock for $66 per share.
Required:
1. How will each of these transactions in 2024, including an adjustment on December 31 for the investment's fair value, affect the
financial statements?
2. How will the sale on February 1, 2025, affect the financial statements?
Complete this question by entering your answers in the tabs below.
Req 1A
Req 1B
Req 1C
Assets
Req 2
Purchases 1,600 shares (10%) of Power Drive Corporation's common stock for $48 per share.
Note: Amounts to be deducted should be indicated with a minus sign.
Balance Sheet
Liabilities
Stockholders' Equity
Retained Earnings
Common Stock
< Req 1A
Revenues & Gains
Req 1B >
Income Statement
Expenses & Losses
Net Income
Transcribed Image Text:Req 1A
Show Transcribed Text
Req 1A
Receives a cash dividend of $1.70 per share.
Note: Amounts to be deducted should be indicated with a minus sign.
Balance Sheet
Reg 1B
Show Transcribed Text
Reg 1A
Assets
Req 18
Assets
Reg 1C
Req 18
The fair value of Power Drive Corporation's common stock is $61 per share.
Note: Amounts to be deducted should be indicated with a minus sign.
Req 1C
Assets
Reg 2
Req 1C
Req 2
Liabilities
Req 2
Balance Sheet
Liabilities
Gator Shoes sells 400 shares of Power Drive Corporation's common stock for $66 per share.
Note: Amounts to be deducted should be indicated with a minus sign.
Balance Sheet
Liabilities
Stockholders' Equity
Retained Earnings
Common Stock
Common Stock
Stockholders' Equity
Retained Earnings
<Roq 1A
Common Stock
< Req 18
Stockholders' Equity
Retained Earnings
<Req 1C
Revenues & Gains
Roq 1C >
Revenues & Gains
Req 2 >
Revenues & Gains
Req 2 >
Income Statement
Expenses & Losses
Income Statement.
Income Statement
Net Income
Expenses & Losses
Expenses & Losses
Net Income
Net Income
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