On November 16, SRO, Inc., paid $98,000 for an investment in the stock of Northwest Pacific Railway

Question:

On November 16, SRO, Inc., paid $98,000 for an investment in the stock of Northwest Pacific Railway (NPR). SRO intends to account for these shares as trading securities. On December 12, SRO received a $700 cash from NPR. It is now December 31, and the market value of the NPR stock is $94,000. For this investment, show what SRO 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...