Question

Accounting for Equity Securities—Influential The Dunn Company had the following transactions and adjustment related to a...

Accounting for Equity Securities—Influential
The Dunn Company had the following transactions and adjustment related to a stock investment:

2016
Jan. 15 Purchased 12,000 shares of Van, Inc.’s common stock at $10 per share plus a brokerage commission of $900. These shares represent a 30 percent ownership of Van’s common stock.
Dec. 31 Received a cash dividend of $2.25 per share of common stock from Van.
Dec. 31 Made the adjusting entry to reflect income from the Van stock investment. Van’s 2016 net income is $85,000.
2017
Jan. 20 Sold all 12,000 shares of the Van common stock for $125,500.

Record the transactions and adjustment of the Dunn Company using journal entries.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Date General Journal Debit Credit
Jan. 15, 2016 Stock investment-influential (Van) 120900
Cash [(12000 x $10) + $900] 120900
(To record purchase of equity securities)
Dec. 31, 2016 Cash (12000 x $2.25) 27000
Stock investment-influential (Van) 27000
(To record receipt of dividend)
Dec. 31, 2016 Stock investment-influential (Van) (30% x $85000) 25500
Income from stock investment-influential 25500
(To record portion of Van's net income)
Jan. 20, 2017 Cash 125500
Gain on sale of investment 6100
Stock investment-influential (Van) 119400
(To record sale of equity securities)
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Accounting for Equity Securities—Noninfluential The Dale Company had the following transactions and adjustment related to a...
Accounting for Equity Securities—Noninfluential The Dale Company had the following transactions and adjustment related to a stock investment: 2016 Nov. 15 Purchased 5,000 shares of Lake, Inc.’s common stock at $17 per share plus a brokerage commission of $900. Dale Company expects to sell the stock in the near future. Dale is unable to exercise any significant control over Lake. Dec. 22 Received a cash dividend of $2.25 per share of common stock from Lake. Dec. 31 Made the adjusting...
2016 Jan. 15 Purchased 12,000 shares of Van, Inc.’s common stock at $11 per share plus...
2016 Jan. 15 Purchased 12,000 shares of Van, Inc.’s common stock at $11 per share plus a brokerage commission of $900. These shares represent a 30 percent ownership of Van’s common stock. Dec. 31 Received a cash dividend of $3.25 per share of common stock from Van. Dec. 31 Made the adjusting entry to reflect income from the Van stock investment. Van’s 2016 net income is $86,000. 2017 Jan. 20 Sold all 12,000 shares of the Van common stock for...
2016 Jan. 15 Purchased 15,000 shares of Park, Inc.’s common stock at $10 per share plus...
2016 Jan. 15 Purchased 15,000 shares of Park, Inc.’s common stock at $10 per share plus a brokerage commission of $1,000. These shares represent a 25 percent ownership of the Park common stock. Dec. 31 Received a cash dividend of $2.80 per share of common stock from Park. Dec. 31 Made the adjusting entry to reflect income from the Park stock investment. Park’s 2016 net income is $124,000. 2017 Jan. 20 Sold all 15,000 shares of the Park common stock...
Reporting of and Analyzing Financial Effects of Available-for-Sale (Equity) Securities Guay Company had the following transactions...
Reporting of and Analyzing Financial Effects of Available-for-Sale (Equity) Securities Guay Company had the following transactions and adjustment related to a stock investment classified as a trading security. Assume that when the shares were purchased, management did not intend to sell the stock in the near future. Record the transactions and adjustments for Guay Company under this assumption. 2015 Nov. 15 Purchased 6,000 shares of Core, Inc.'s common stock at $16 per share plus a brokerage commission of $900. Guay...
The following equity investment transactions were completed by Vintage Company during a recent year: Apr. 10....
The following equity investment transactions were completed by Vintage Company during a recent year: Apr. 10. Purchased 11,000 shares of Delew Company’s common stock for a price of $60 per share plus a brokerage commission of $220. Delew Company has 250,000 shares of common stock outstanding. July 8. Received a quarterly dividend of $0.85 per share on the Delew Company investment. Sept. 10. Sold 3,000 shares for a price of $54 per share less a brokerage commission of $90. Dec....
Required information Problem 15-5A Long-term investment transactions; unrealized and realized gains and losses LO C2, P3,...
Required information Problem 15-5A Long-term investment transactions; unrealized and realized gains and losses LO C2, P3, P4 [The following information applies to the questions displayed below.] Stoll Co.’s long-term available-for-sale portfolio at December 31, 2016, consists of the following. Available-for-Sale Securities Cost Fair Value 45,000 shares of Company A common stock $ 1,031,600 $ 910,000 12,000 shares of Company B common stock 322,750 312,000 26,000 shares of Company C common stock 1,332,500 1,287,875 Stoll enters into the following long-term investment...
Kampus Corporation had the following eight investment transactions or events: Jan 1    Purchased Argon Co....
Kampus Corporation had the following eight investment transactions or events: Jan 1    Purchased Argon Co. bonds for $10,000 cash. (Purchase is considered a short-term investment in available-for-sale (AFS) debt securities.) Jan 3    Purchased 1,200 shares of Elmer, Inc. for $36,000 cash. (Purchase is considered a long-term stock investment with insignificant influence.) Mar 31    Received cash dividend of $0.25 per share from Elmer, Inc. Jun 1    Purchased 5,000 shares of Logan, Inc. for $60 per share. These...
Survivor Company, a public company, had the following transactions in securities during 2017: a) Purchased $1,000,000...
Survivor Company, a public company, had the following transactions in securities during 2017: a) Purchased $1,000,000 par value of 5% Diamond Ltd. bonds (when the market interest rate was 4%), on January 1st, 2017 (right after the interest was paid). The bonds will mature on July 1, 2023, and pay interest on July 1st and January 1st. The bonds will be an amortized cost investment. b) Purchased 100,000 common shares of Midtel Ltd., a publicly-traded company, as an FVTOCI investment...
The following equity investment transactions were completed by Romero Company during a recent year: Apr. 10...
The following equity investment transactions were completed by Romero Company during a recent year: Apr. 10 Purchased 3,800 shares of Dixon Company for a price of $49 per share plus a brokerage commission of $120. July 8 Received a quarterly dividend of $0.90 per share on the Dixon Company investment. Sept. 10 Sold 1,200 shares for a price of $41 per share less a brokerage commission of $90.
Houston Company engaged in the following investment transactions during the current year. Feb. 17 Purchased 490...
Houston Company engaged in the following investment transactions during the current year. Feb. 17 Purchased 490 shares of Medical Company common stock for $15 per share plus a brokerage commission of $150. Houston does not have significant influence over Medical Company. April 1 Bought 29,000 of the 100,000 outstanding shares of Olde Company for $290,000. Goodwill of $79,000 was included in the price. June 25 Received a $1.30 per share dividend on Medical Company stock. June 30 Olde reported second-quarter...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT