Gator Shoes, Inc., manufactures a line of stylish waterproof footwear. The following transactions relate to investments in

Question:

Gator Shoes, Inc., manufactures a line of stylish waterproof footwear. The following transactions relate to investments in common stock during 2021. March 1 Purchases 3,000 shares (10%) of Power Drive Corporation’s common stock for $62 per share.

July 1 Receives a cash dividend of $1.25 per share.

December 31 The fair value of Power Drive Corporation’s common stock is $75 per share.

On February 1, 2022, Gator Shoes sells 1,000 shares of Power Drive Corporation’s common stock for $70 per share.

Required:

1. Record each of these transactions in 2021, including an adjustment on December 31 for the investment’s fair value, if appropriate.

2. Record the sale on February 1, 2022.

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...

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