Investment: To get the financial benefits, money spent or invested is known as investment. The benefits can be in the form of dividend, interest, and rental income. Shares: A share is the ownership certificate of the company. A share is that part of company’s capital which cannot further divide. Shares define the right to vote and right of participation in the profit of the company. Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts. Accounting rules for journal entries: To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains. To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains. To prepare: (a) The journal entries in the books of Company E, (b) The journal entries in the books of Company W.

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Answer 1

Question

Chapter 16, Problem 16.2DIE

(a)

To determine

Investment: To get the financial benefits, money spent or invested is known as investment. The benefits can be in the form of dividend, interest, and rental income.

Shares: A share is the ownership certificate of the company. A share is that part of company’s capital which cannot further divide. Shares define the right to vote and right of participation in the profit of the company.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: (a) The journal entries in the books of Company E, (b) The journal entries in the books of Company W.

(b)

To determine

To prepare: The journal entries in the books of Company W.

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Answer 2

Question

Chapter 16, Problem 16.2DIE

(a)

To determine

Investment: To get the financial benefits, money spent or invested is known as investment. The benefits can be in the form of dividend, interest, and rental income.

Shares: A share is the ownership certificate of the company. A share is that part of company’s capital which cannot further divide. Shares define the right to vote and right of participation in the profit of the company.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: (a) The journal entries in the books of Company E, (b) The journal entries in the books of Company W.

(b)

To determine

To prepare: The journal entries in the books of Company W.

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Answer 3

Question

Chapter 16, Problem 16.2DIE

(a)

To determine

Investment: To get the financial benefits, money spent or invested is known as investment. The benefits can be in the form of dividend, interest, and rental income.

Shares: A share is the ownership certificate of the company. A share is that part of company’s capital which cannot further divide. Shares define the right to vote and right of participation in the profit of the company.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: (a) The journal entries in the books of Company E, (b) The journal entries in the books of Company W.

(b)

To determine

To prepare: The journal entries in the books of Company W.

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Answer 4

Question

Chapter 16, Problem 16.2DIE

(a)

To determine

Investment: To get the financial benefits, money spent or invested is known as investment. The benefits can be in the form of dividend, interest, and rental income.

Shares: A share is the ownership certificate of the company. A share is that part of company’s capital which cannot further divide. Shares define the right to vote and right of participation in the profit of the company.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: (a) The journal entries in the books of Company E, (b) The journal entries in the books of Company W.

(b)

To determine

To prepare: The journal entries in the books of Company W.

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Answer 5

Chapter 16, Problem 16.2DIE

(a)

To determine

Investment: To get the financial benefits, money spent or invested is known as investment. The benefits can be in the form of dividend, interest, and rental income.

Shares: A share is the ownership certificate of the company. A share is that part of company’s capital which cannot further divide. Shares define the right to vote and right of participation in the profit of the company.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: (a) The journal entries in the books of Company E, (b) The journal entries in the books of Company W.

(b)

To determine

To prepare: The journal entries in the books of Company W.

Answer 6

Chapter 16, Problem 16.2DIE

(a)

To determine

Investment: To get the financial benefits, money spent or invested is known as investment. The benefits can be in the form of dividend, interest, and rental income.

Shares: A share is the ownership certificate of the company. A share is that part of company’s capital which cannot further divide. Shares define the right to vote and right of participation in the profit of the company.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: (a) The journal entries in the books of Company E, (b) The journal entries in the books of Company W.

Answer 7

Chapter 16, Problem 16.2DIE

(a)

To determine

Investment: To get the financial benefits, money spent or invested is known as investment. The benefits can be in the form of dividend, interest, and rental income.

Shares: A share is the ownership certificate of the company. A share is that part of company’s capital which cannot further divide. Shares define the right to vote and right of participation in the profit of the company.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: (a) The journal entries in the books of Company E, (b) The journal entries in the books of Company W.

Answer 8

(b)

To determine

To prepare: The journal entries in the books of Company W.

Answer 9

(b)

To determine

To prepare: The journal entries in the books of Company W.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 16 - Prob. 1Q Ch. 16 - Prob. 2Q Ch. 16 - Prob. 3Q Ch. 16 - Prob. 4Q Ch. 16 - 5. What is the cost of an investment in stock? Ch. 16 - Prob. 6Q Ch. 16 - Prob. 7Q Ch. 16 - Prob. 8Q Ch. 16 - Prob. 9Q Ch. 16 - Prob. 10Q

To prepare: The journal entries in the books of Company W.

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Chapter 16 Solutions