The December 31, 2016, balance sheet of FT Corporation included the following: Investments-Associated Companies at Equity ..........$15,000,000
Question:
The December 31, 2016, balance sheet of FT Corporation included the following:
Investments-Associated Companies at Equity ..........$15,000,000
Suppose the company completed the following investment transactions during 2017:
Mar. 2 Purchased 2,000 common shares as a short-term investment, paying $38.00 per share plus brokerage commission of $900. 5 Purchased additional shares in an associated company at a cost of $1,600,000. Commissions on the purchase were $30,000.
Jul. 21 Received the semi-annual cash dividend of $1.50 per share on the short-term investment purchased March 2.
Aug. 17 Received a cash dividend of $160,000 from an associated company.
Oct. 16 Sold 1,100 shares of the short-term investment (purchased on March 2) for $36.00 per share, less brokerage commission of $600.
Nov. 8 Purchased short-term investments for $310,000, plus brokerage commission of $5,000.
17 Received a cash dividend of $280,000 from an associated company. Dec. 31 Received annual reports from associated companies. Their total net income for the year was $6,900,000. Of this amount, FT's proportion is 24 percent.
Required
1. Record the transactions in the general journal of FT Corporation.
2. Post entries to the Equity Investments T-account and determine its balance at December 31, 2017.
3. Assume the beginning balance of Short-Term Investments was $104,000. 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 $425,000 at December 31, 2017, show how FT Corporation would report short-term investments and investments in associated companies on the ending balance sheet. (No journal entry is required.) Use the following format:
.png)
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... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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...
Step by Step Answer:
Req 1 General Journal DATE ACCOUNT TITLES AND EXPLANATIONS POST REF DEBIT CREDIT 2017 Mar 2 ShortTer...View the full answer
Horngrens Accounting
ISBN: 978-0133855388
10th Canadian edition Volume 2
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo Ann L. Johnston, Peter R. Norwood
