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. . On October 15, 2019, AI Co. bought 3,000 shares of Kim Inc. for $20.00 per share. This investment is classified by Al Co.
. . On October 15, 2019, AI Co. bought 3,000 shares of Kim Inc. for $20.00 per share. This investment is classified by Al Co. as a trading security. The following information relates to events subsequent to the purchase: December 31, 2019: Market price of Kim Inc. shares is $25.00 per share March 31, 2020: AI Co. sold 1,500 shares of Kim Inc. for $30.00 per share May 21, 2020: Kim Inc. paid (in cash) a dividend of $0.50 per share December 31, 2020: Market price of Kim Inc. shares is $27.00 per share. When recording the following transactions, please include the calculation (i.e., the pieces) supporting each number in your journal entry. Please do the following: 1. Make the accounting entry for AI Co. to record the purchase of Kim Inc. stock on October 15, 2019. (5 points) 2. Make the accounting entry for Al Co. to record the market value of Kim Inc. stock on December 31, 2019. (7 points) 3. Make the accounting entry for AI Co. to record the sale of Kim Inc. stock on March 31, 2020. (9 points) 4. Make the accounting entry for Al Co. to record the receipt of dividends on May 21, 2020. (5 points) 5. Make the accounting entry for Al Co. to record the market value of Kim Inc. stock on December 31, 2020. (9 points) 6. How would your answer to #5 be different if I had told you that Al Co. classified Kim Inc. as an available for sale security? In your answer, show me that you understand the ramifications for net income of the distinction between a trading and available-for-sale security. (4 points)
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