Explanation Stock Investments: It refers to the investment in a financial instrument known as stock that, gives the right of ownership to an investor equal to the amount invested in the company. Thus, it enables a stockholder to claim in the profits and the assets of the company. Journal entry : Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Prepare the journal entries to record the given transactions as follows: a. March 22 – Purchase of short-term investment Date Account Titles and Description Post Ref. Debit ($) Credit ($) March 22 Stock investment in company R (1) 10,000 Cash 10,000 (To record purchase of short-term investment in cash) Table (1) Stock investment in Company R is an asset account, and it increases the value of assets by $10,000. Hence, debit stock investment account with $10,000. Cash is an asset account and it decreases the value of asset by $10,000. Therefore, credit cash account for $10,000. Working note: Calculate the value of short-term investment: Short-term investment = ( Number of shares × Price per share ) = ( 1 , 000 × $ 10 per share ) = $ 10 , 000 (1) b. July 1 – Cash dividend received from Company R Date Account Titles and Description Post Ref. Debit ($) Credit ($) July 1 Cash 1,000 Dividend revenue (2) 1,000 (To record the cash dividends received from company R) Table (2) Cash is an asset account and it increases the value of asset by $1,000. Therefore, debit Cash account for $1,000. Dividend revenue is a revenue account, and it increases the value of equity by $1,000. Hence, credit dividend revenue with $1,000. Working note: Calculate the value of dividends Dividends = ( Number of shares × Dividend per share ) = ( 1 , 000 × $ 1.00 per share ) = $ 1 , 000 (2) c

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ISBN: 9781260158625

Author: Wild

Publisher: MCG

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Chapter 15, Problem 7E

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Chapter 15 Solutions

Principles of Financial Accounting.

Ch. 15 - Prob. 1MCQ Ch. 15 - Prob. 2MCQ Ch. 15 - Prob. 3MCQ Ch. 15 - Prob. 4MCQ Ch. 15 - Prob. 5MCQ Ch. 15 - Prob. 1DQ Ch. 15 - Prob. 2DQ Ch. 15 - Prob. 3DQ Ch. 15 - Prob. 4DQ Ch. 15 - Under what conditions should investments be...

Ch. 15 - Prob. 6DQ Ch. 15 - Prob. 7DQ Ch. 15 - Prob. 8DQ Ch. 15 - Prob. 9DQ Ch. 15 - Prob. 10DQ Ch. 15 - Prob. 11DQ Ch. 15 - Prob. 12DQ Ch. 15 - Refer to Googles statement of comprehensive income...Ch. 15 - Prob. 14DQ Ch. 15 - Which of the following statements are true of...Ch. 15 - Prob. 2QS Ch. 15 - Prob. 3QS Ch. 15 - Kitty Company began operations in the current year...Ch. 15 - Refer to the information in QS 15-4. (1) After the...Ch. 15 - Prob. 6QS Ch. 15 - Prob. 7QS Ch. 15 - Prob. 8QS Ch. 15 - Prob. 9QS Ch. 15 - Prob. 10QS Ch. 15 - Prob. 11QS Ch. 15 - Prepare Tiker Companys journal entries to record...Ch. 15 - Prob. 13QS Ch. 15 - Prob. 14QS Ch. 15 - Prob. 15QS Ch. 15 - Prob. 16QS Ch. 15 - Prob. 17QS Ch. 15 - Prob. 18QS Ch. 15 - Debt and equity securities and short- and...Ch. 15 - Prob. 2E Ch. 15 - Prepare Natura Co.s journal entries to record the...Ch. 15 - Prob. 4E Ch. 15 - On December 31, Lujack Co. held the following...Ch. 15 - Prob. 6E Ch. 15 - Prob. 7E Ch. 15 - Prob. 8E Ch. 15 - Prob. 9E Ch. 15 - Prob. 10E Ch. 15 - Prob. 11E Ch. 15 - Prob. 12E Ch. 15 - Prob. 13E Ch. 15 - Selected accounts from GermX Co.s adjusted trial...Ch. 15 - Prob. 15E Ch. 15 - Use the following information of Prescrip Co. to...Ch. 15 - Prob. 17E Ch. 15 - Prob. 1AP Ch. 15 - Mead Inc. began operations in Year 1. Following is...Ch. 15 - Stoll Co.s long-term available-for-sale portfolio...Ch. 15 - Rose Company had no short-term investments prior...Ch. 15 - Prob. 5AP Ch. 15 - Prob. 6AP Ch. 15 - Prob. 1BP Ch. 15 - Paris Inc. began operations in Year 1. Following...Ch. 15 - Troys long-term available-for-sale portfolio at...Ch. 15 - Prob. 4BP Ch. 15 - Prob. 5BP Ch. 15 - Prob. 6BP Ch. 15 - Prob. 15SP Ch. 15 - Prob. 1AA Ch. 15 - Prob. 2AA Ch. 15 - Prob. 3AA Ch. 15 - Prob. 1BTN Ch. 15 - Prob. 2BTN Ch. 15 - Prob. 3BTN Ch. 15 - Prob. 5BTN

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