Boston Today: Publishers completed the following investment transactions during

Question

Boston Today: Publishers completed the following investment transactions during 2018 and 2019: Dec. 6 Purchased 2500 shares of loveable stock, at the price of $24.00 per share. The intending to sell the investment next month. Boston did not have significante influence over Loveable Dec. 23 Recieved a cash dividend of $1.50 per share on the Loveable stock. Dec. 31 Adjusted the investment to its market value of $11.00 per share. Jan. 27, 2019 loveable stock for $18.20 per share. 1. Journalize Boston Today's investment transations. Explaination are not requiered. 2. On December 31, 2018, how would the Loveable stock be classified and at what value would it be reported on balance sheet?

Explanation / Answer

1.(a) Investment in loveable co.(2500*24) $6000

Cash $6000

(b) Divedend Reciveables(2500*1.5) $3750

Dividend income $3750

(c) Unrealizied Holding loss[2500(24-11)] $32500

Investment in loveable co. $32500

(d) Cash $45500

unrealizied holding gain[2500(18.20-11)] $18000

Investment in loveable co. $27500

2.on December 31, 2018 loveable stock is classifind in short term investment under current asset and its value is,

(60000-32500)=27500$

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