Horngren's Financial & Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780133866292
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 10, Problem 10.22BP
Accounting for stock investments
The beginning
During the year, Water Source completed the following investment transactions:
| Mar. 3 | Purchased 6,000 shares at $7 per share of Jack Software common stock as a long-term, available-for-sale investment, representing 3% ownership. |
| May 15 | Received a cash dividend of $0.53 per share on the Jack investment. |
| Dec. 15 | Received a cash dividend of $1 10,000 from Larsen investment. |
| 31 | Received Larsen's annual report showing $110,000 of net income. |
| 31 | Received Jack's annual report showing $600,000 of net income for the year. |
| 31 | Larsen's stock fair value at year-end was $728,500. |
| 31 | Jack's common stock fair value at year-end was $10 per share. |
Requirements
1. Journalize the transactions for the year of Water Source.
2.
3. Prepare Water Source's partial balance sheet at December 31, 2016, from your answers in Requirement 2.
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The following equity investment transactions were completed by Vintage Company during a recent year:
Apr.
10.
Purchased 2,300 shares of Delew Company’s common stock for a price of $49.85 per share plus a brokerage commission of $345. Delew Company has 260,000 shares of common stock outstanding.
July
8.
Received a quarterly dividend of $0.25 per share on the Delew Company investment.
Sept.
10.
Sold 1,500 shares for a price of $45 per share less a brokerage commission of $190.
Dec.
31.
At the end of the accounting period, the fair value of the remaining 800 shares of Delew Company’s stock was $49.50 per share.
Journalize the entries for these transactions. If an amount box does not require an entry, leave it blank. If required, round the final answers to the nearest dollar.
Apr. 10 - Purchase
Investments-Delew Company Stock
Cash
July 8 - Dividend
Cash
Dividend Revenue
Sept. 10 - Sale
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The following equity investment transactions were completed by Romero Company during a recent year:
Apr. 10.
Purchased 2,800 shares of Dixon Company for a price of $61.5 per share plus a brokerage commission of $1,400.
July 8.
Received a quarterly dividend of $0.7 per share on the Dixon Company investment.
Sept. 10.
Sold 1,900 shares for a price of $55 per share less a brokerage commission of $780.
Journalize the entries for these transactions. If required, round the final answers to the nearest dollar.
For a compound transaction, if an amount box does not require an entry, leave it blank.
Apr. 10 - Purchase
July 8 - Dividend
Sept. 10 - Sale
The following equity investment transactions were completed by Vintage Company during a recent year:
Apr.
10
Purchased 4,000 shares of Delew Company’s common stock for a price of $52 per share plus a brokerage commission of $105. Delew Company has 240,000 shares of common stock outstanding.
July
8
Received a quarterly dividend of $0.50 per share on the Delew Company investment.
Sept.
10
Sold 1,200 shares for a price of $42 per share less a brokerage commission of $90.
Dec.
31
At the end of the accounting period, the fair value of the remaining 2,800 shares of Delew Company’s stock was $51.53 per share.
Required:
Journalize the entries for these transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.…
Chapter 10 Solutions
Horngren's Financial & Managerial Accounting (5th Edition)
Ch. 10 - Prob. 1QCCh. 10 - Which of the following investments is most likely...Ch. 10 - If Intervale Railway invests 100,000 in 5% bonds...Ch. 10 - Prob. 4QCCh. 10 - Prob. 5QCCh. 10 - Prob. 6QCCh. 10 - Prob. 7QCCh. 10 - Harvard Co. purchased a trading investment on...Ch. 10 - Prob. 9QCCh. 10 - Prob. 10QC
Ch. 10 - What is a debt security?Ch. 10 - Prob. 2RQCh. 10 - Prob. 3RQCh. 10 - Briefly describe the five specific types of debt...Ch. 10 - How is the purchase of a held-to-maturity debt...Ch. 10 - Prob. 6RQCh. 10 - What method is used for investments in equity...Ch. 10 - What method is used for investments in equity...Ch. 10 - What adjustment must be made at the end of the...Ch. 10 - Where on the financial statements is an unrealized...Ch. 10 - Prob. 11RQCh. 10 - Prob. 12RQCh. 10 - Prob. 13RQCh. 10 - What does the rate of return on total assets...Ch. 10 - Identifying why companies invest and classifying...Ch. 10 - Prob. 10.2SECh. 10 - Prob. 10.3SECh. 10 - Accounting for equity method On January 1, 2016,...Ch. 10 - Accounting for trading investments On February 1,...Ch. 10 - Prob. 10.6SECh. 10 - Computing rate of return on total assets Kabra's...Ch. 10 - Prob. 10.8ECh. 10 - Prob. 10.9ECh. 10 - Accounting for bond investments Otter Creek Co....Ch. 10 - Accounting for stock investments Dollar Bill...Ch. 10 - Prob. 10.12ECh. 10 - Prob. 10.13ECh. 10 - Accounting for stock investments Suppose that on...Ch. 10 - Prob. 10.15ECh. 10 - Prob. 10.16ECh. 10 - A Accounting for bond investments Suppose Jenner...Ch. 10 - Prob. 10.18APCh. 10 - Accounting for stock investments The beginning...Ch. 10 - Accounting for bond investments Suppose Ritter...Ch. 10 - Classifying and accounting for stock investments...Ch. 10 - Accounting for stock investments The beginning...Ch. 10 - Prob. 10.23CPCh. 10 - Prob. 10.1CTEICh. 10 - Wild Adventure conducts tours of wildlife reserves...Ch. 10 - Prob. 10.1CTFSCCh. 10 - Prob. 10.1CTTPCh. 10 - In 150 words or fewer, explain the difference...
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