On January 1, 2015 the West Company made 2 purchases: purchased 400 of the 1000
ID: 2585943 • Letter: O
Question
On January 1, 2015 the West Company made 2 purchases: purchased 400 of the 1000 shares of Kardashian Company for $60,000. At this time Kardashian book value of assets was $80,000 any excess is attributable to a car with a 5 year life and no salvage purchased 200 of the 100,000 shares of Madona Company for $40,000. All of Madonna's assets had a book value equal to market value any excess is attributable to goodwill 1-Jul Kardashian Company paid a $3 per share dividend 1-Aug Madonna Company paid a $2 per share dividend 31-Dec Kardashian Company reported income of $19000; its stock is selling for $111 per share 31-Dec Madonna Company reported income of $110,000; its stock is selling for $93 per share 2016 1-Jul Kardashian Company paid a $1 per share dividend 1-Aug Madonna Company announced they would not be paying any dividends this year 31-Dec Kardashian Company reported a loss of $3000; its stock is selling for $96 per share 31-Dec Madonna Company reported a loss of $40,000; its stock is selling for $101 per share 2017 January 5th West sold its entire investment in Kardashian for $98 per share January 5th West sold its entire investment in Madonna for $102 per share MAKE ALL JOURNAL ENTRIES WEST MAKES IN CONNECTION WITH ITS INVESTMENT IN KARDASHIAN AND MADONNA FOR 2015, 2016 AND 2017... .DON'T FORGET TO RECORD WEST'S PURCHASE OF THE STOCK REQUIRED:Explanation / Answer
In The Books of West Company
Journal Entries
2015
Jan 1
Investment in Kardashian Company Dr. 32,000
Car A/c Dr. 28,000
To Bank A/c 60,000
(400 shares of Kardashian Co. purchased along
with a car having years life and no salvage value)
Investment in Madona Company Dr. 40,000
To Bank a/c 40,000
(200 shares of Kardashian Co. purchased)
July 1 Bank A/c Dr. 1,200
To Income from Dividend A/c 1,200
(Dividend of Kardashian Co received @ $3 per share)
Bank A/c Dr. 400
To Income from Dividend A/c 400
(Dividend of Madona Co received @ $2 per share)
2016
July 1
Bank A/c Dr. 400
To Income from Dividend A/c 400
(Dividend of Kardashian Co received @ $1 per share)
2017
Jan 5
Bank A/c Dr. 39,200
To Investment in Kardashian Company A/c 39200
(400 shares of Kardashian Company sold @ $98
per share)
Bank A/c Dr. 20,400
To Investment in Madona Company A/c 20,400
(200 shares of Madona Company sold @ $102
per share)
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