On November 16, ACA, Inc., paid $95,000 for an investment in the stock of American Pacific Railway

Question:

On November 16, ACA, Inc., paid $95,000 for an investment in the stock of American Pacific Railway (APR). ACA plans to account for these shares as trading securities. On December 12, ACA received a $400 cash from APR. It is now December 31, and the market value of the APR stock is $92,000. For this investment, show what ACA should report in its income statement and balance sheet.

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...