+1-415-670-9189
info@expertsmind.com
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:

2014

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
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
Analyse annual reports of NAB {National Australian Bank} in light of the reporting requirements imposed on accountants and those charged with governance of corporations
What is the difference between accural-basis accounting and cash-basis accounting? Why would politicians prefer the cash basis over the accrual basis?
There are 300 packages in the beginning inventory on the first of January. Also, the company wishes to maintain an ending inventory of 10 percent of the next month's sales.
NBS, Inc. is a technology consulting firm focused on Website development and integration of Internet business applications. The president of the company expects to incur $71
Margie died on October 3, 2011. Her will directed that upon her death, all of her assets be transferred outright to her husband, Michael. The following are all of the assets
Determine the present value of the bonds at issuance. Assume that bonds are issues at the price computed in requirement 1. Prepare an effective-interest method amortizatio ta
You have a client considering plans for transferring her wealth over the next five to ten years. Given the uncertainty in this area of the tax code, what are some key factor
Midland Oil has $1,000 par value bonds outstanding at 8 percentinterest. The bonds will mature in 25 years. Compute the current price of the bonds if the present yield to ma