The balance sheet of Spottified Corp. recently included: Investments in significantly influenced and other companies $2,500,000 Spottified
Question:
Investments in significantly influenced and other companies $2,500,000 Spottified Corp. included its short-term investments among the current assets; the investments described above were long-term. Assume the company completed the following investment transactions during 2017:
Mar. 3 Purchased 8,000 common shares as a short-term investment, paying $25.00 per share plus brokerage commission of $500.
4 Purchased additional shares in a company that is significantly influenced by Spottified Corp. at a cost of $600,000 plus brokerage commission of $4,500.
May 14 Received semi-annual cash dividend of $1.70 per share on the short-term investment purchased March 3.
Jun. 15 Received cash dividend of $55,000 from a significantly influenced company. Aug. 28 Sold the short-term investment (purchased on March 3) for $24.00 per share, less brokerage commission of $500.
Oct. 24 Purchased other short-term investments for $275,000, plus brokerage commission of $400.
Dec. 15 Received cash dividend of $30,000 from a significantly influenced company. 31 Received annual reports from significantly influenced companies. Their total net income for the year was $1,300,000. Of this amount, Spottified Corp.'s proportion is 30 percent.
Required
1. Record the transactions in the general journal of Spottified Corp.
2. Post entries to the Investments in Significantly Influenced and Other Companies T-account, and determine its balance at December 31, 2017.
3. Assume the beginning balance of Short-Term Investments was at a cost of $250,000. Post entries to the Short-Term Investments T-account and determine its balance at December 31, 2017.
4. Assuming the market value of the short-term investment portfolio is $510,000 at December 31, 2017, show how Spottified Corp. would report short-term investments and investments in significantly influenced and other companies on the December 31, 2017, balance sheet. Use the following format:
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Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
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Req 1 General Journal DATE ACCOUNT TITLES AND EXPLANATIONS POST REF DEBIT CREDIT 2017 Mar 3 ShortTer...View the full answer
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