Question

jan Purchased 500 shares of Velcon stock, paying $41 per share. The investment represents 45% ownership...

jan Purchased 500 shares of Velcon stock, paying $41 per share. The investment represents 45% ownership in Velcon's voting stock and Know All has significant influence over Velcon. Know All intends to hold the investment for the indefinite future. Aug. 22 Received a cash dividend of $0.76 per share on the Velcon stock. Dec. 31 Velcon's current market value is $38 per share. 31 Velcon reported net income of $350,000 for the year ended 2018. Requirements 1. Journalize Know All's transactions. Explanations are not required. 2. Classify and prepare partial financial statements for Know All's 45 % Velcon investment for the year ended December? 31, 2018. Requirement 1. Journalize Know All's transactions. Explanations are not required. ?(Record debits? first, then credits. Exclude explanations from journal entries. If no entry is? required, select? "No entry? required" on the first line of the Accounts column and leave the remaining cells? blank.) Jan.? 14: Purchased 500 shares of Velcon ?stock, paying $ 41 per share. The investment represents 45 % ownership in Velcon's voting stock and Know All has significant influence over Velcon. Know All intends to hold the investment for the indefinite future. Date Accounts Debit Credit Jan. 14 Aug.? 22: Received a cash dividend of $ 0.76 per share on the Velcon stock. Date Accounts Debit Credit Aug. 22 Dec.? 31: Velcon's current market value is $ 38 per share. Date Accounts Debit Credit Dec. 31 Dec.? 31: Velcon reported net income of $ 350,000 for the year ended 2018. Date Accounts Debit Credit Dec. 31 Requirement 2. Classify and prepare partial financial statements for Know All's 45 % Velcon investment for the year ended December? 31, 2018. Begin by showing the account and amount of any assets that would appear on Know All's balance sheet as it relates to the Velcon investment at December? 31, 2018.? (If a box is not used in the financial? statement, leave the box? empty; do not select a label or enter a? zero.) Know All Investments Balance Sheet (Partial) December 31, 2018 Current Assets: Long-term Assets: Stockholders' Equity Accumulated Other Comprehensive Income: Complete the partial income statement for the year ended December? 31, 2018 as it relates to Know All's Velcon investment. ?(Use a minus sign or parentheses to enter a loss. If a box is not used in the financial? statement, leave the box? empty; do not select a label or enter a? zero.) Know All Investments Income Statement (Partial) For the Year Ended December 31, 2018 Other Income and (Expenses)

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Answer #1

1.

Date Accounts Debit Credit
Jan. 14 Investment in Velcon (500 x $41) 20500
Cash 20500
Aug. 22 Cash (500 x $0.76) 380
Investment in Velcon 380
Dec. 31 No entry required
Dec. 31 Investment in Velcon 157500
Investment income ($350000 x 45%) 157500

2.

Know All Investments
Balance Sheet (Partial)
December 31, 2018
Current Assets:
Long-term Assets:
Investment in Velcon 177620
Stockholders' Equity
Accumulated Other Comprehensive Income
Know All Investments
Income Statement (Partial)
For the Year Ended December 31, 2018
Other Income and (Expenses)
Investment income 157500

Note: Kindly fill the amounts and labels appropriately since the format is not provided with the question.

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