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Entries for Stock Investments, Dividends, and Sale of Stock Yerbury Corp. manufactures construction equipment. Journalize the...

Entries for Stock Investments, Dividends, and Sale of Stock

Yerbury Corp. manufactures construction equipment.

Journalize the entries to record the following selected equity investment transactions completed by Yerbury during a recent year:

Feb. 2 Purchased for cash 700 shares of Wong Inc. stock for $59 per share plus a $350 brokerage commission.
Mar. 16 Received dividends of $0.30 per share on Wong Inc. stock.
June 7 Purchased 500 shares of Wong Inc. stock for $69 per share plus a $250 brokerage commission.
July 26 Sold 850 shares of Wong Inc. stock for $74 per share less a $425 brokerage commission. Yerbury assumes that the first investments purchased are the first investments sold.
Sept. 25 Received dividends of $0.40 per share on Wong Inc. stock.

In your computations, round per share amounts to two decimal places. When required, round final answers to the nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank.

Feb. 2 Investments-Wong Inc. Stock
Cash
Mar. 16 Cash
Dividend Revenue
June 7 Investments-Wong Inc. Stock
Cash
July 26 Cash
Gain on Sale of Investments
Investments-Wong Inc. Stock
Sept. 25 Cash
Dividend Revenue

Solutions

Expert Solution

Date Entry Debit Credit
2 Feb Investment-wrong inc stock 41650
Cash 41650
16 Mar Cash 210
Dividend Revenue 210
7 June Investment-wrong inc stock 34750
Cash 34750
26 July Cash 62475
Gain on sale of investment 10400
Investment-wrong inc stock 52075
25 Sep Cash 140
Dividend Revenue 140

Working:

Date Detail No of Share Per Share Brokerage Working Investment Price
2 Feb Purchase 700 59 350 (700*59)+350 41650
16 Mar Dividend 700 0.3 (700*0.3) 210
7 June Purchase 500 69 250 (500*69)+250 34750
26 July Sale -850 74 425 (850*74)-425 62475
25 Sep Dividend (700+500-850) 350 0.4 (350*0.4) 140
Purchase Price of Shares Sold (FIFO)
700 Share pur on 2 Feb 41650
150 Shares pur on 7 Jun 10425
(34750/500)*150
Total Cost of Shares Sold 52075
Sale Price 62475
Gain 10400

ekkarill92 answered 3 years ago
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