Rose Company had no short-term investments prior to this year. It had the following transactions this year involving short-term stock investments with insignificant influence. Apr. 16 Purchased 6,000 shares of Gem Co. stock at $24.00 per share. July 7 Purchased 3,000 shares of PepsiCo stock at $55.00 per share. 20 Purchased 1,500 shares of Xerox stock at $15.00 per share. Aug. 15 Received a(n) $0.95 per share cash dividend on the Gem Co. stock. 28 Sold 3,000 shares of Gem Co. stock at $30.75 per share. Oct. 1 Received a $1.60 per share cash dividend on the PepsiCo shares. Dec. 15 Received a $1.10 per share cash dividend on the remaining Gem Co. shares. 31 Received a $1.00 per share cash dividend on the PepsiCo shares. Required: 1. Prepare journal entries to record the preceding transactions and events.

Question

contestada

Respuesta :

subhashmanglia1 subhashmanglia1 · Answer 1 · 2020-03-05T08:22:24+01:00

Explanation:

April 16: Dr Short-term investment (6000*24) 144000

Cr Cash 144000

(To record purchase of shares of Gem co)

July-7: Dr Short-term investment (3000*55) 165000

Cr Cash 165000

(To record purchase of shares of pepsico)

July-20. Dr Short-term investment (1500*15) 22500

Cr Cash 22500

(To record purchase of shares of Xerox)

Aug-15. Dr Cash (6000*.95) 5700

Cr Dividend income 5700

(To record cash dividend of Gemco)

Aug-28. Dr Cash (3000*30.75 ) 92250

Cr Short-term investment (3000*24) 72000

Cr Gain on sale of investment(3000 * 6.75 N#1) 20250

(To record sale of shares of Gemco ).

Oct-1. Dr Cash (1.60 *3000) 4800

Cr Dividend income 4800

(To record cash dividend of pesico)

Dec-15. Dr Cash ( 6000*1.60) 9600

Cr Dividend income 9600

(To record cash dividend or remaining shares of gemco)

Dec-31. Dr Cash (3000*1.00) 3000

Cr Dividend income 3000

(To record cash dividend )

[N#1: 24-30.75= 6.75 *3000 = 20250]