Question
Please show all the steps on where numbers are being pulled from. Keitel Corp. had the following securities (all purchased in 2017) in its investment
Please show all the steps on where numbers are being pulled from.
Keitel Corp. had the following securities (all purchased in 2017) in its investment portfolio on
December 31, 2017:
Cost | Market value, 12/31/2017 | |
6,000 Alpha common shares | $55,500 | $73,200 |
2,000 Beta preferred shares | $571,200 | $559,000 |
10,000 Omicron common shares | $250,200 | $260,200 |
In 2018, Keitel made the following changes to the portfolio:
1.On Feb. 15, sold 2,400 Alpha shares for $13.50 per share less fees of $600. .
2.On April 9, purchased 4,000 Candy Ltd. common shares at $9.00 per share plus fees of $1,080.
3.On Nov. 15, sold 8,000 Omicron shares for $10 per share less fees of $1,200.
On December 31, 2018, the fair values per share of the securities were as follows: Alpha $8; Beta $300; Omicron $9; and Candy $21. Keitel accounts for the portfolio using the FV-OCI model without recycling.
a. Prepare journal entries to record the sale of Alpha shares.
b. Prepare journal entries on December 31, 2018 to adjust the carrying (book) value of the equity portfolio.
c. Alpha declared a dividend of $0.20 per share on April 1, 2018. Prepare the journal entry. Should the dividend be booked to net income or OCI?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started