Question
Rose Company had no short-term investments prior to this year. It had the following transactions this year involving short-term stock investments with insignificant influence. April
Rose Company had no short-term investments prior to this year. It had the following transactions this year involving short-term stock investments with insignificant influence.
April 16 Purchased 6,000 shares of Gem Company stock at $26.25 per share.
July 7 Purchased 3,000 shares of PepsiCo stock at $51.00 per share.
July 20 Purchased 1,500 shares of Xerox stock at $18.00 per share.
August 15 Received a $0.95 per share cash dividend on the Gem Company stock.
August 28 Sold 3,000 shares of Gem Company stock at $33.00 per share.
October 1 Received a $1.80 per share cash dividend on the PepsiCo shares.
December 15 Received a $1.10 per share cash dividend on the remaining Gem Company shares.
December 31 Received a $1.00 per share cash dividend on the PepsiCo shares.
The year-end fair values per share are Gem Company, $28.50; PepsiCo, $48.25; and Xerox, $15.00.
5. Identify the dollar increase or decrease from Roses short-term stock investments on (a) its income statement for this year and (b) the equity section of its balance sheet at this year-end.
\begin{tabular}{|l|l|l|} \hline & Amount & Increase or Decrease \\ \hline (a) Income statement for this year & & \\ \hline (b) The equity section of its balance sheet at this year-end & & \\ \hline \end{tabular}
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