In: Accounting
On January 1 2020 Potter Company purchased 100 of the 1000 shares of Voldomort Company for $800. Potter has no significant influence over Voldomort | ||||
On July 1, 2020 Voldomort declared and paid a $1 per share dividend | ||||
On December 31st Voldomort's stock was selling for $9 per share; Voldomort reported income of $4000 | ||||
On January 1 2021 Potter Company purchased 300 shares of Voldomort Company for $2700. Potter now has two seats on the Voldomort Board of Directors | ||||
On March 1, Voldomort had a two for one stock split. | ||||
On July 1, Voldomort declared and paid a $1 per share dividend | ||||
On December 31st Voldomort reported income of $5000 and its stock was selling for $7 per share | ||||
On July 1, 2022 Voldomort announced that it will not pay a dividend in 2022. | ||||
On December 31st Voldomort reported a loss of $2000 and its stock was selling for $5 per share | ||||
On January 3rd 2023 Potter sold all of its shares in Voldomort at $5.50 per share | ||||
REQUIRED: | ||||
A) MAKE THE REQUIRED JOURNAL ENTRIES FOR POTTER CONNECTED WITH ITS OWNERSHIP OF VOLDOMORT STOCK IN | ||||
2020 | ||||
2021 | ||||
2022 | ||||
2023 | ||||
B) FILL IN THE FOLLOWING TABLE | ||||
2020 | 2021 | 2022 | ||
Investment in Voldomort | ||||
income from investment in Voldomort |
Some of the activities mentioned in question doesn't have journal entries as they don't make any transaction on Potter company
They are:
On July 1st, 2021 it needs to be observed that there are 800 shares instead of 400 because prior to that there is 2-1 stock split which is not recorded in Journal.
Date | Account Title or Description | Debit | Credit |
Jan. 1, 2020 | Bought 100 shares of Voldomort company @ $8 a share | $ 800.00 | |
Cash | $ 800.00 | ||
Record purchase in stock | |||
Jul. 1, 2020 | Cash | $ 100.00 | |
Dividends at $1 per share for 100 shares | $ 100.00 | ||
Record dividends income | |||
Jan. 1, 2021 | Bought 300 shares of Voldomort company @ $9 a share | $ 2,700.00 | |
Cash | $ 2,700.00 | ||
Record purchase of stock | |||
Jul. 1, 2021 | Cash | $ 800.00 | |
Dividends at $1 per share for 800 shares | $ 800.00 | ||
Record dividends income | |||
Jan. 3, 2023 | Cash | $ 4,400.00 | |
Sole 800 share of Voldomort @ $5.5 a share | $ 4,400.00 | ||
Record sale of stock |
As table in question is not quite visible I am assuming this will be the structure of table.
2020 | 2021 | 2022 | |
---|---|---|---|
Investment in Voldomort | $ 800.00 | $ 2,700.00 | $ - |
Income from investment in Voldomort | $ 100.00 | $ 800.00 | $ - |