Question

StampStamp

Company completed these​ long-term equity investment transactions during

2018​.

.1. Journalize

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​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.

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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

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

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​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

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​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

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