Question 3 These are two independent situations: Prepare all the necessary journ

Question

Question 3

These are two independent situations:

Prepare all the necessary journal entries for 2017 for (a) Sosey Cosmetics and (b) Williams Inc. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

2017

1. Sosey Cosmetics

Date

Account Titles and Explanation

Debit

Credit

2. Williams Inc.

Date

Account Titles and Explanation

Debit

Credit

Question 3 - List of accounts

Accounts Payable
Accounts Receivable
Accumulated Depreciation-Buildings
Accumulated Depreciation-Equipment
Allowance for Doubtful Accounts
Bonds Payable
Buildings
Cash
Cash Dividends
Common Stock
Common Stock Dividends Distributable
Cost of Goods Sold
Debt Investments
Discount on Bonds Payable
Dividend Revenue
Dividends Payable
Equipment
Fair Value Adjustment-Trading
Fair Value Adjustment-Available-For-Sale
Gain on Sale of Debt Investments
Gain on Sale of Stock Investments
Goodwill
Income Tax Expense
Income Taxes Payable
Interest Expense
Interest Payable
Interest Receivable
Interest Revenue
Inventory
Land
Loss on Sale of Debt Investments
Loss on Sale of Stock Investments
Notes Payable
Paid-in Capital in Excess of Par Value-Common Stock
Paid-in Capital in Excess of Par Value-Preferred Stock
Paid-in Capital in Excess of Stated Value-Common Stock
Preferred Stock
Premium on Bonds Payable
Prepaid Insurance
Revenue from Stock Investments
Short-term Investments
Stock Dividends
Stock Investments
Unrealized Gain or Loss - Equity
Unrealized Gain - Income
Unrealized Loss - Income

1. Sosey Cosmetics acquired 12% of the 182,000 shares of common stock of Elite Fashion at a total cost of $12 per share on March 18, 2017. On June 30, Elite declared and paid a $46,500 dividend. On December 31, Elite reported net income of $232,000 for the year. At December 31, the market price of Elite Fashion was $14 per share. The stock is classified as available-for-sale. 2. Williams Inc. obtained significant influence over Kasey Corporation by buying 25% of Kasey’s 22,800 outstanding shares of common stock at a total cost of $9 per share on January 1, 2017. On June 15, Kasey declared and paid a cash dividend of $36,700. On December 31, Kasey reported a net income of $129,000 for the year.

Explanation / Answer

1 Sosey Cosmetics Date Account Titles and Explanation Debit Credit 18-Mar Available for sale Securities          2,184,000 Cash          2,184,000 182,000*12 30-Jun Cash                  5,580 Dividend Revenue                  5,580 46,500*12% 31-Dec Fair Value Adjustment-Available-For-Sale              364,000 Unrealized Holding Gain or Loss - Equity              364,000 182,000*2 2 Williams Inc. Investment in Kasey Corp Stock                51,300 Cash                51,300 22800*25%*9 Cash                  9,175 Investment in Kasey Corp Stock                  9,175 36,700*25% Investment in Kasey Corp Stock                32,250 Revenue from Stock Investments                32,250 129000*25%

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