Indigo Corporation purchased 370 shares of Sherman Inc. common stock for $13,100 (Indigo does not have significant influence). During the year, Sherman paid a cash dividend of $3.00 per share. At year-end, Sherman stock was selling for $37.50 per share. Assume the stock is nonmarketable. Your answer is partially correct. Prepare Indigo's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (List all debit entries before credit entries. Credit account titles are automatically indented when 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.) No. Account Titles and Explanation (a) (b) (c) Equity Investments Cash Cash Dividend Revenue Unrealized Holding Gain or Loss -Income Fair Value Adjustment Debit 13,100 1,110 8,250 Credit 13,100 1,110 8,250
Indigo Corporation purchased 370 shares of Sherman Inc. common stock for $13,100 (Indigo does not have significant influence). During the year, Sherman paid a cash dividend of $3.00 per share. At year-end, Sherman stock was selling for $37.50 per share. Assume the stock is nonmarketable. Your answer is partially correct. Prepare Indigo's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (List all debit entries before credit entries. Credit account titles are automatically indented when 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.) No. Account Titles and Explanation (a) (b) (c) Equity Investments Cash Cash Dividend Revenue Unrealized Holding Gain or Loss -Income Fair Value Adjustment Debit 13,100 1,110 8,250 Credit 13,100 1,110 8,250
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject: acounting
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Indigo Corporation purchased 370 shares of Sherman Inc. common stock for $13,100 (Indigo does not have significant influence).
During the year, Sherman paid a cash dividend of $3.00 per share. At year-end, Sherman stock was selling for $37.50 per share.
Assume the stock is nonmarketable.
Prepare Indigo's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value
adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (List all debit entries before credit entries. Credit account titles
are automatically indented when 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.)
Your answer is partially correct.
No. Account Titles and Explanation
(a)
(b)
(c)
Equity Investments
Cash
Cash
Dividend Revenue
Unrealized Holding Gain or Loss -Income
Fair Value Adjustment
Debit
13,100
1,110
8,250
Credit
13,100
1,110
8,250
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