Chapter 1 Problem 10-14
Jan. 2 Investment in King Corporation 700,000
Cash 700,000
Mar. 1 Investment in Plastic Company 660,000
Cash 660,000
Apr. 1 Cash (10,000 x 5) 50,000
Dividend income 50,000
July 1 Received 2,000 shares as 20% stock dividend on
10,000 Plastic Company shares originally held.
Shares now held, 12,000.
Aug. 1 Investment in Makati Corporation 500,000
Cash 500,000
Oct. 1 Received 60,000 new shares of Plastic Company
as a result of a 5 for 1 split of 12,000 original shares.
1 Cash (10,000 x 5) 50,000
Dividend income 50,000
31 Stock rights (3/33 x 660,000) 60,000
Investment in Plastic Company 60,000
Nov. 15 Investment in Plastic Company 180,000
Cash (6,000 shares x 20) 120,000
Stock rights 60,000
Dec. 1 Cash (66,000 shares x 5) 330,000
Dividend income 330,000
15 Cash (10,000 shares x 30) 300,000
Investment in Plastic Company 100,000
(10,000/60,000 x 600,000)
Gain on sale of investment 200,000
Summary of investments Shares Cost
King Corporation common 10,000 700,000
Plastic Company common
Block 1 50,000 500,000
Block 2 6,000 180,000
Makati Corporation common 10,000 500,000
76,000 1,880,000
Of course, the investments will simply be described as “investments in equity
securities” in the balance sheet.
No comments:
Post a Comment