On December 31, 2013, Eli Associates owned the following securities, held as long-term investments. On this date,
Question:
.png)
On this date, the total fair value of the securities was equal to its cost. The securities are not held for influence or control over the investees. In 2014, the following transactions occurred.
July 1 Received $1 per share semiannual cash dividend on Holly Co. common stock.
Aug. 1 Received $0.50 per share cash dividend on Trowbridge Co. common stock.
Sept. 1 Sold 1,500 shares of Holly Co. common stock for cash at $8 per share, less brokerage fees of $300.
Oct. 1 Sold 600 shares of Trowbridge Co. common stock for cash at $30 per share, less brokerage fees of $600.
Nov. 1 Received $1 per share cash dividend on Oriental Motor Co. common stock.
Dec. 15 Received $0.50 per share cash dividend on Trowbridge Co. common stock.
31 Received $1 per share semiannual cash dividend on Holly Co. common stock.
At December 31, the fair values per share of the common stocks were Trowbridge Co. $23, Holly Co. $7, and Oriental Motors Co. $19.
Instructions
(a) Journalize the 2014 transactions and post to the account Stock Investments. (Use the T-account form.)
(b) Prepare the adjusting entry at December 31, 2014, to show the securities at fair value. The stock should be classified as non-trading securities.
(c) Show the balance sheet presentation of the investment-related accounts at December 31, 2014. At this date, Eli Associates has common stock $2,000,000 and retained earnings $1,200,000.
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
a 2015 July 1 Cash 5000 X 1 5000 Dividend Revenue 5000 Aug 1 Cash 4000 X 50 2000 Dividend Revenue 20...View the full answer
Financial Accounting
ISBN: 978-1119491057
8th edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel
