Maxwell Company engaged in the following transactions involving short term investments a Purchased 200 shares of Bartco stock for $ 12,800 b Received a $ 1 60 per share dividend on the Bartco stock c Sold 40 shares of the Bartco stock for $ 61 per share d Purchased 380 shares of Newton stock for $ ...

Journal 1 Date Account and Explanation Debit Credit a InvestmentsTrading Securities 12800 Cash 12800 ...

Maxwell Company engaged in the following transactions involving short-term investments: a. Purchased 200 shares of Bartco stock

Question:

Maxwell Company engaged in the following transactions involving short-term investments:
a. Purchased 200 shares of Bartco stock for $ 12,800.
b. Received a $ 1.60-per-share on the Bartco stock.
c. Sold 40 shares of the Bartco stock for $ 61 per share.
d. Purchased 380 shares of Newton stock for $ 20,900.
e. Received a of $ 1.00 per share on the Newton stock.
At December 31, the Bartco stock has a market value of $ 60 per share, and the Newton stock has a market value of $ 59 per share.
Required:
1. Prepare entries for Maxwell’s journal to record these transactions assuming they are trading securities.
2. Calculate the market value of Maxwell’s short-term investment at December 31.
3. Prepare the necessary adjusting entry at December 31.
4. What is the income statement effect of the adjusting entry?
5. How would these investments be reported on the December 31 balance sheet? Dividend
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