Question
1/ On February 15, Jewel Company buys 7,100 shares of Marcelo Corp. common stock at $28.54 per share plus a brokerage fee of $400. The
1/ On February 15, Jewel Company buys 7,100 shares of Marcelo Corp. common stock at $28.54 per share plus a brokerage fee of $400. The stock is classified as available-for-sale securities. This is the companys first and only investment in available-for-sale securities. On March 15, Marcelo Corp. declares a dividend of $1.16 per share payable to stockholders of record on April 15. Jewel Company received the dividend on April 15 and ultimately sells half of the Marcelo Corp. stock on November 17 of the current year for $29.31 per share less a brokerage fee of $250. The journal entry to record the dividend on April 15 is:
Multiple Choice
Debit Cash $7,511; credit Dividend Revenue $7,511.
Debit Cash $8,236; credit Dividend Revenue $8,236.
Debit Cash $8,236; credit Interest Revenue $8,236.
Debit Cash $7,511; credit Interest Revenue $7,511.
Debit Cash $8,236; credit Gain on Sale of Investments $8,236.
2/ On January 4, Year 1, Barber Company purchased 5,500 shares of Convell Company for $64,500 plus a broker's fee of $1,100. Convell Company has a total of 27,500 shares of common stock outstanding and it is presumed the Barber Company will have a significant influence over Convell. During each of the next two years, Convell declared and paid cash dividends of $0.85 per share, and its net income was $77,000 and $72,000 for Year 1 and Year 2, respectively. What is the book value of Barber's investment in Convell at the end of Year 2?
Multiple Choice
$65,600.
$86,050.
$56,250.
$95,400.
$94,400.
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