Question
On January 1, 2008 SSS buys 500 shares of Co common stock for $50/share for the stock portfolio as short-term investment. SSSs purchase represents 1%
On January 1, 2008 SSS buys 500 shares of Co common stock for $50/share for the stock portfolio as short-term investment. SSSs purchase represents 1% of outstanding Co stock and the company exerts no influence on Co. Journalize the purchase by SSS.
01/01/2008
Stock investment $25000
Cash $25000
On February 1 Co pays a $1/share dividend. Journalize SSSs receipt of the dividend.
02/01
Cash $500
Stock investment $500
On Feb 15, Co reports $1mm net income. What JE does the company make, if any, to recognize the income?
02/15
On March 1 SSS decides to sell 250 shares of its Co stock for $45/share. Journalize SSSs sale of Co stock.
03/01
Cash $11250
Loss on sale of stock investment $1250
Stock investment $12500
Fast forward to December 31, 2008: The price of Co shares is $49/share. What fair market adjustment does SSS make, if any?
How will this stock investment be presented on the balance sheet?
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CIA Part 1 Essentials Of Internal Auditing Certified Internal Auditor 2019
Authors: Muhammad Zain
1st Edition
1091949182, 978-1091949188
