the following equity investment-related transactions were completed by Kindle Co
ID: 2460227 • Letter: T
Question
the following equity investment-related transactions were completed by Kindle Company in 2014:
Jan. 12 Purchased 1,400 shares of Baxter Company for a price of $57.75 per share plus a brokerage commission of $350.
Apr. 10 Received a quarterly dividend of $0.70 per share on the Baxter Company investment.
June 3 Sold 900 shares for a price of $52 per share less a brokerage commission of $200.
Journalize the entries for these transactions. In your computations, round per share amounts to two decimal places. If required, round the final answers to the nearest dollar
Jan. 12 - Purchase
Apr. 10 - Dividend
June 3 - Sale
Explanation / Answer
Journal Entries Date Particulars Dr Amount Cr Amount Jan 12, 2014 Investment in Baxter Co. Dr. 80850 To Bank A/c 80850 (1400 Shares purchased of Baxter Co. @ $57.75 per share) Jan 12, 2014 Investment in Baxter Co. Dr. $350 To Bank A/c $350 (Brokerage Paid on 1400 Shares purchased of Baxter Co.) Apr 10, 2014 Bank A/c Dr. $980 To Dividend Recd. - Baxter Co. $980 (Quaterly dividend recd on Baxter Shares $0.70 per share) June 3, 2014 Bank A/c Dr. 46600 Loss On sale of Shares A/c Dr. 5600 To Investment in Baxter Co. 52200 (900 Shares of Baxter Co. Sold) Working Notes Total Cost of 1400 Shares of Baxter Co. = $80850 + $350 = $81200 Cost Per Share = $81200 / 1400 Shares = $58 per Share Calculation of Profit/(Loss) on Sale of 900 Shares Sale Price - 900 Shares @ $52 per Share 46800 Less: Cost Price of 900 Shares - 900 Shares @$58 52200 Less: Brokerage Paid on Sale of Shares $200 Profit(Loss) on Sale of Shares ($5,600)
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