Question

StampStamp Company completed these​ long-term equity investment transactions during 2018​. .1. Journalize StampStamp ​Company's investment transactions....

StampStamp

Company completed these​ long-term equity investment transactions during

2018​.

.1. Journalize

StampStamp

​Company's investment transactions. Explanations are not required. ​(Record debits​ first, then credits. Exclude explanations from any journal​ entries.)Apr​ 10: Purchased 300 shares of RoboticsRobotics stock​ (less than 15​% of RoboticsRobotics​'s outstanding​ stock), paying ​$23 per share.

StampStamp

Company intends to hold the investment indefinitely.

Journal Entry

Date

Accounts

Debit

Credit

Apr

10

Jul​ 22: Received a cash dividend of

​$1.26

per share on the

RoboticsRobotics

stock.

Journal Entry

Date

Accounts

Debit

Credit

Jul

22

Dec​ 31: Adjusted the

RoboticsRobotics

investment to its current market value of

$5,200.

Date

Accounts

Debit

Credit

Dec

31

2. Assume the

RoboticsRobotics

stock is

StampStamp

​Company's only investment. Explain how these transactions will be reflected on

StampStamp

​Company's income statement for the year ended December​ 31,

2018.

The income statement will report

of $

and

of $

.

3. Show how to report the investment on

StampStamp

​Company's balance sheet at December​ 31,

2018.

Ignore income taxes. ​(Use a parentheses or a minus sign when entering​ losses.)

Stamp Inc.

Balance Sheet (Partial)

December 31, 2018

Assets

Long-term assets

Homework Answers

Answer #1

1.

The 6900 = 300 x 23

The 378 = 300 x 1.26

On december 31 - The balance as per books is 6522 (6900 - 378)

The market Value is 5200 (So the investement booked loss of 6522 - 5200)

2.

The first two transaction will not affect in Income statement. Means cash and investemnt accounts will show in Balances sheet as asset side.

The 3 rd journal entry The unrealized Holding Loss account will show on income statement in expense side.

An amount of 1322 will be show in Income Statement.

3.

Under Long term asset on Balance sheet

The Investment on Robotics will show with the amount of 5200 with market value as on 31 december

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