On January 2, 2016, Alpha Company purchased 25,000 shares ofBravo Company stock on the open market for $50 per share as along-term investment. On both June 15 and December 15, BravoCompany paid $50,000 in dividends for a total annual dividend of$100,000. On December 31, Bravo Company reported net income of$400,000 and the stock had a market value of $75 per share. BothAlpha and Bravo operate on a calendar year.
Part A â Assume that at all times during the year there were250,000 shares of Bravo Company stock outstanding.
Record the journal entries for the purchase of the stock, thedividends, and the reporting of income at year end on Alpha Companybooks.
State what the year-end value of the stock investment account ison the Alpha Company books.
Part B â Assume that at all times during the year there were100,000 shares of Bravo Company stock outstanding.
Record the journal entries for the purchase of the stock, thedividends, and the reporting of income at year end on Alpha Companybooks.
State what the year-end value of the stock investment account ison the Alpha Company books.
ACCT 221 Quiz # 1
ANSWER SHEET FOR PROBLEM 2
PROBLEM 2, PART A
DATE
ACCOUNT TITLE
DEBIT
CREDIT
The Stock investment account had a ____________ balance of$_____________ at year end.
(debit or credit balance?)
PROBLEM 2, PART A
DATE
ACCOUNT TITLE
DEBIT
CREDIT
The Stock investment account had a ____________ balance of$_____________ at year end.
(debit or credit balance?)
On January 2, 2016, Alpha Company purchased 25,000 shares ofBravo Company stock on the open market for $50 per share as along-term investment. On both June 15 and December 15, BravoCompany paid $50,000 in dividends for a total annual dividend of$100,000. On December 31, Bravo Company reported net income of$400,000 and the stock had a market value of $75 per share. BothAlpha and Bravo operate on a calendar year.
Part A â Assume that at all times during the year there were250,000 shares of Bravo Company stock outstanding.
Record the journal entries for the purchase of the stock, thedividends, and the reporting of income at year end on Alpha Companybooks.
State what the year-end value of the stock investment account ison the Alpha Company books.
Part B â Assume that at all times during the year there were100,000 shares of Bravo Company stock outstanding.
Record the journal entries for the purchase of the stock, thedividends, and the reporting of income at year end on Alpha Companybooks.
State what the year-end value of the stock investment account ison the Alpha Company books.
ACCT 221 Quiz # 1
ANSWER SHEET FOR PROBLEM 2
PROBLEM 2, PART A
DATE | ACCOUNT TITLE | DEBIT | CREDIT |
The Stock investment account had a ____________ balance of$_____________ at year end.
(debit or credit balance?)
PROBLEM 2, PART A
DATE | ACCOUNT TITLE | DEBIT | CREDIT |
The Stock investment account had a ____________ balance of$_____________ at year end.
(debit or credit balance?)
Related questions
QUESTION 7a:
Alpha Company prepares quarterly adjusting entries. On November1, 2017, Alpha Company purchased equipment with a sticker price of$8,515 and signed a note due in 9 months for $10,000 that includedinterest in the value of the note. Use this information to preparea general journal entry for the August 1 equipment purchase.Prepare any additional general journal adjusting entries for FiscalYears 2017 & 2018. Additionally, prepare the general journalentry to record the payment of the note when due in 2018.
General Journal
General Journal
Date | Accounts | Debit | Credit |
11/1/17 | |||
12/31/17 | |||
3/31/18 | |||
6/30/18 | |||
7/31/18 | |||
QUESTION 7b:
Alpha Company uses aging of Accounts Receivable to estimateuncollectible. The unadjusted Trial Balance amount of AccountsReceivable on December 31, 2016, has a balance that consistsof:
Days outstanding | Amount | Estimated Uncollectible |
0 â 60 | $300,000 | 1% |
61 â 120 | 90,000 | 2% |
Over 120 | 100,000 | 6% |
Total | $490,000 | 4,005 |
Activity during FiscalYear 2016, for Alpha Company consisted ofJuly 15 Alpha wrote of the Bravo Zulu Company account as notcollectable for the amount of $8,500.
Oct. 20 Alpha company recovered $5,500 from the Charlie DeltaCompany for settlement of their prior debt that had been off duringFY 2015.
Alpha Companyâs December 31, 2015 allowance for uncollectibleaccounts was $2,700/ Under the aging method, what amounts shouldAlpha Company report at December 31, 2016 for:
1. Allowance for Uncollectible Accounts
2. Bad Debt Expense
ANSWER 7:
1.___________________________
2.___________________________
Exercise 11-2 Sheridan Company had these transactions during the current period. June 12 Issued 84,000 shares of $1 par value common stock for cash of $315,000. July 11 Issued 3,400 shares of $102 par value preferred stock for cash at $107 per share. Nov. 28 Purchased 1,350 shares of treasury stock for $8,150.
Prepare the journal entries for the Sheridan Company transactions shown above.
On January 1, Marigold Corp. had 61,700 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred.
| Apr. 1 | Issued 12,600 additional shares of common stock for $12 per share. | |
| June 15 | Declared a cash dividend of $1.50 per share to stockholders of record on June 30. | |
| July 10 | Paid the $1.50 cash dividend. | |
| Dec. 1 | Issued 5,600 additional shares of common stock for $11 per share. | |
| Dec. 15 | Declared a cash dividend on outstanding shares of $1.70 per share to stockholders of record on December 31. |
| (a) | Prepare the entries, if any, on each of the three dates that involved dividends. |
