Redwood Products Inc. is a wholesaler outdoor camping. The company began operations on January 1, 20X1. The following transactions relate to securities acquired by Redwood Products Inc., which has a fiscal year ending on December 31: 20X1 Feb. 1 Purchased 12,000 shares or 10% of Trunk Inc. as an investment at $27 per share, including the brokerage commission Mar. 18A cash dividend of $0.18 per share was received on the Trunk stock Oct. 5 Sold 1,000 shares of Trunk Inc. stock at $21.00 per share, less a brokerage commission of $50 Dec. 18 Received a regular cash dividend of $0.24 per share on Trunk Inc. stock Dec. 31 Trunk Inc. reported $235,000 net income for the year and has a fair value of $33.00 per share. 20X2 Jan. 25 Purchased an influential interest in Starry Nights Co. for $376,000 by purchasing 70,000 shares directly from the estate of the founder of Starry Nights. There are 250,000 shares of Starry Nights Co. stock outstanding Jul. 16 Received a cash dividend of $0.24 per share on Trunk Inc. stock Dec. 16 Received a cash dividend of $0.24 per share plus an extra dividend of $0.06 per share on Trunk Inc. stock Dec. 31 Received $30,100 of cash dividends on Starry Nights Co. stock. Starry Nights Co. reported net income of $190,000 in 20X2. Dec. 31 Trunk Inc. reported $150,000 net income and has a fair value of $30 per share. а. Prepare the journal entries for the above transactions.
Redwood Products Inc. is a wholesaler outdoor camping. The company began operations on January 1, 20X1. The following transactions relate to securities acquired by Redwood Products Inc., which has a fiscal year ending on December 31: 20X1 Feb. 1 Purchased 12,000 shares or 10% of Trunk Inc. as an investment at $27 per share, including the brokerage commission Mar. 18A cash dividend of $0.18 per share was received on the Trunk stock Oct. 5 Sold 1,000 shares of Trunk Inc. stock at $21.00 per share, less a brokerage commission of $50 Dec. 18 Received a regular cash dividend of $0.24 per share on Trunk Inc. stock Dec. 31 Trunk Inc. reported $235,000 net income for the year and has a fair value of $33.00 per share. 20X2 Jan. 25 Purchased an influential interest in Starry Nights Co. for $376,000 by purchasing 70,000 shares directly from the estate of the founder of Starry Nights. There are 250,000 shares of Starry Nights Co. stock outstanding Jul. 16 Received a cash dividend of $0.24 per share on Trunk Inc. stock Dec. 16 Received a cash dividend of $0.24 per share plus an extra dividend of $0.06 per share on Trunk Inc. stock Dec. 31 Received $30,100 of cash dividends on Starry Nights Co. stock. Starry Nights Co. reported net income of $190,000 in 20X2. Dec. 31 Trunk Inc. reported $150,000 net income and has a fair value of $30 per share. а. Prepare the journal entries for the above transactions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Redwood Products Inc. is a wholesaler outdoor camping. The company began operations on
January 1, 20X1. The following transactions relate to securities acquired by Redwood Products
Inc., which has a fiscal year ending on December 31:
20X1
Feb. 1 Purchased 12,000 shares or 10% of Trunk Inc. as an investment at $27 per share,
including the brokerage commission
Mar. 18A cash dividend of $0.18 per share was received on the Trunk stock
Oct. 5 Sold 1,000 shares of Trunk Inc. stock at $21.00 per share, less a brokerage
commission of $50
Dec. 18 Received a regular cash dividend of $0.24 per share on Trunk Inc. stock
Dec. 31 Trunk Inc. reported $235,000 net income for the year and has a fair value of $33.00
per share.
20X2
Jan. 25 Purchased an influential interest in Starry Nights Co. for $376,000 by purchasing
70,000 shares directly from the estate of the founder of Starry Nights. There are
250,000 shares of Starry Nights Co. stock outstanding
Jul. 16 Received a cash dividend of $0.24 per share on Trunk Inc. stock
Dec. 16 Received a cash dividend of $0.24 per share plus an extra dividend of $0.06 per
share on Trunk Inc. stock
Dec. 31 Received $30,100 of cash dividends on Starry Nights Co. stock. Starry Nights Co.
reported net income of $190,000 in 20X2.
Dec. 31 Trunk Inc. reported $150,000 net income and has a fair value of $30 per share.
a. Prepare the journal entries for the above transactions.
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