Prepare t-accounts for the investment assets
Course:- Accounting Basics
Reference No.:- EM132048559

Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Accounting Basics

Question - Dream Corporation generated excess cash and invested in securities, as follows:


Jul. 2 Purchased 3,600 shares of Bravo, Inc. common stock at $ 13.00 per share. Dream holds the stock in its active trading account and plans to sell the stock within three months, when the company will need the cash for normal operations.

Aug. 21 Received a cash dividend of $ 0.30 per share on the Bravo stock investment.

Sep. 16 Sold the Bravo stock for $ 13.60 per share.

Oct. 8 Purchased 500 shares of Zigbo stock at $ 10.00 per share. The stock is held in the active trading account as Dream plans to hold the Zigbo stock for less than five months.

Dec. 31 Zigbo stock's current market price is $ 9.00 per share.

Requirements -

1. Classify each of the investments made during 2014. (Assume the investments represent less than 20% of ownership of outstanding voting stock.)

2. Journalize the 2014 transactions. Explanations are not required.

3. Prepare T-accounts for the investment assets and show how to report the investments on Dreams balance sheet at December 31, 2014.

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
If a city acquires a new office building under a capital lease agreement, 1)The cost of the building should be reported in the __ 2)The "cost" of the building is computed as _
Phyllis sued Martin's estate and won a $65,000 settlement. She showed the probate court that she carried out her end of a compensatory arrangement with her companion, under
Do you believe that auditors can be sufficiently independent and objective when the auditee is also a client and is paying the auditor's fees? Why or why not? Answer in yo
If the company can not cut costs any lower than they already are what would the profit margin on sales be if they meet the market selling price
Tversky and Co. have devised a new psychological test for investors' risk tolerance. They expect to sell 10,000 tests in the first year at $150 each. Cash costs associated w
Just about everyone remembers a favourite comic book hero from childhood-whether it was Spiderman, Tin Tin, or even Garfield. LeonAvelino and Barry Matthews readily admit th
Prepare, in general journal form, the workpaper entries relating to the intercompany sale of equipment that are necessary in the December 31, 2012 consolidated financial sta
Which of the following is not treated as a change in accounting principle? A) A change from LIFO to FIFO for inventory valuation B) A change to a different method of depreciat