Question
Acer Company purchased the following investments in 2020. January 1: Company T, 10,000 shares, market price of $8 per share (a 5% investment) February 1:
Acer Company purchased the following investments in 2020.
January 1: Company T, 10,000 shares, market price of $8 per share (a 5% investment)
February 1: Company E, 20,000 shares, market price of $10 per share (a 30% investment)
June 1: Company T declared and paid a cash dividend of $3 per share to its owners.
July 1: Company E declared and paid a cash dividend of $2 per share to its owners.
On December 31, 2020 each of the investments reported the following net income to its investors:
Company T $100,000
Company E $200,000
On December 31, 2020 each of the investments had the following market price per share:
Company T $12
Company E $ 8
- For the two investments combined, how much dividend income did Acer Company recognize in 2020? _____________
- For the two investments combined, how much Unrealized Gain or Loss did Acer recognize in the Income Statement for 2020? _______________
- For the two investments, how much Income from Investee would Acer recognize in the Income Statement for 2020? __________________
4. Prepare all journal entries on the books of Acer Company for the investment activity above.
January 1:
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The Insiders Guide To Dol Plan Audits How To Survive An Employee Benefit Plan Audit
Authors: Frank J. Bitzer, Jr. Ferrigno, Nicholas W.
1st Edition
0872182711, 978-0872182714
