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Big Co. acquires shares in Little Co. over the years in a number of transactions, as indicated below: Little Co has 100,000 shares of stock
- Big Co. acquires shares in Little Co. over the years in a number of transactions, as indicated below: Little Co has 100,000 shares of stock outstanding. This is to be an available for sale investment. Date Event 1/1/20 Purchase 1000 shares of stock at $15/share, plus a $10 commission. 7/1/20 Little pays dividends totalling $29500 12/31/20 Little's share price is $18/share 4/1/21 Purchase 4850 shares of stock at $17/share, plus a $10 commission. 12/31/21 Little's share price is $16/share 3/1/22 Big sells 1,000 shares of Little stock at $17/share, less a $10 commission.Big uses the average cost method to account for their investments.
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