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On January 1, 2018 Vulcan Company purchased 400 of the 1000 shares of Star Trek company...

On January 1, 2018 Vulcan Company purchased 400 of the 1000 shares of Star Trek company stock for $60,000.                                                                                                                  

At this time, Star Trek had a truck with a book value of $40,000 and a fair market value of $80,000. The truck has a life of 5 years with no salvage value and Star Trek uses straight line depreciation                                                                                                                              

On July 1, 2018 Star Trek paid a dividend of $1 per share                                                                                                                              

On December 31, 2018 Star Trek reported a profit of $11,000 and its stock was selling $151 per share                                                                                                                      

On July 1, 2019 Star Trek paid a dividend of $2 per share                                                                                                                               

On December 31, Star Trek reported a loss of $5000 and its stock was selling for $148 per share                                                                                                                 

On July 1, 2020 Star Trek announced that it wasn't paying any dividends in 2020.                                                                                                                              

On December 31, 2020 Star Trek reported a profit of $3000 and its stock was selling for $155 per share                                                                                                                  

On January 31, 2021 Vulcan sold its entire investment in Star Trek at $150 per share                                                                                                                      

REQUIRED                                                                                                                          

A) MAKE ALL THE JOURNAL ENTRIES CONNECTED WITH VULCAN'S INVESTEMENT IN STAR TREK IN                           2018                                                                                                      

                2019                                                                                                      

                2020                                                                                                      

                2021                                                                                                      

                B) FILL IN THE FOLLOWING TABLE                                                                                                                           

                                                                                                                               

                                2018       2019       2020                                                      

INVESTMENT IN STAR TREK                                                                                                                        

INVESTMENT INCOME                                                                                                                  

Solutions

Expert Solution

  1. Journal Entries                                   (All amounts in $)

Year 2018

January 1, 2018                     Investment in Star Trek     Dr.     60,000

                                                           To Cash a/c                               60,000

   (Being investment made in Star Trek)

July 1, 2018                         Cash a/c               Dr.                     400

                                                           To Dividend Income          400

(Being dividend amount received)

July 1, 2018                           Dividend Income Dr.                      400

                                                               To P/L a/c                            400

(Being Dividend amount transferd to P/l)

December 31, 2018               Investment in Star trek Dr.            4400

                                                               Share of Profit from Star Trek (p/l)    4400

    (Being Income booked of Profit from Star Trek)

Year 2019

July 1, 2019                     Cash a/c               Dr.                     800

                                                           To Dividend Income          800

(Being dividend amount received)

July 1, 2019                           Dividend Income Dr.                      800

                                                               To P/L a/c                            800

(Being Dividend amount transferd to P/l)

December 31, 2019          Share of Loss from Star Trek (p/l)    2000

                                                     Investment in Star trek Cr.           2000

    (Being loss booked of loss from Star Trek)

Year 2020

December 31, 2018               Investment in Star trek Dr.            1200

                                                               Share of Profit from Star Trek (p/l)    1200

    (Being Income booked of Profit from Star Trek)

Year 2021

January 31, 2021                  Cash a/c Dr                                                        62000

                                                Loss on Investment in Star Trek(P/l)            1600  

                                                                To Investment in Star Trek                     63600

(Being stock sold and loss booked.

  1. Table

                                                                           2018                                  2019                             2020

Investment in Star Trek                              64400                                     62400                             63600

Investment Income                                        400                                           800                              Nil

ekkarill92 answered 2 weeks ago
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