More Info 3 Purchased 2,000 shares at $6 per share of Cindy Software common stoc

Question

More Info 3 Purchased 2,000 shares at $6 per share of Cindy Software common stock as a long-term, available-for-sale investment, representing 4% ownership. Mar. May 15 Received a cash dividend of $0.94 per share on the Cindy investment. Dec. 15 Received a cash dividend of $50,000 from Brown investment 31 Received Brown's annual report showing $100,000 of net income 31 Received Cindy's annual report showing $110,000 of net income for the year 31 Brown's stock fair value at year-end was $685,000. 31 Cindy's common stock fair value at year-end was $14 per share Print Done

Explanation / Answer

1.

2.

3.

Date Account Titles and Explanation Debit Credit Mar. 3 Long-Term Investments-AFS 12000 Cash (2000 x $6) 12000 (To record purchase of investment) May. 15 Cash (2000 x $0.94) 1880 Dividend Revenue 1880 (To record dividends received) Dec. 15 Cash 50000 Long-Term Investments-Brown 50000 (To record dividends received) Dec. 31 Long-Term Investments-Brown ($100000 x 35%) 35000 Revenue from Investments 35000 (To record share in Brown's net income) Dec. 31 No entry required Dec. 31 No entry required Dec. 31 Fair Value Adjustment-AFS 16000 Unrealized Gain on Investment-AFS [2000 x ($14 - $6)] 16000 (To record AFS investment at fair value)

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.