Entries for Investment in Stock, Receipt of Dividends, and Sale of Shares The following equity investment...

Entries for Investment in Stock, Receipt of Dividends, and Sale of Shares The following equity investment transactions were completed by Romero Company during a recent year: Apr. 10. Purchased 3,400 shares of Dixon Company for a price of $61.5 per share plus a brokerage commission of $1,700. July 8. Received a quarterly dividend of $0.2 per share on the Dixon Company investment. Sept. 10. Sold 2,300 shares for a price of $55 per share less a brokerage commission of $950. Journalize the entries for these transactions. If required, round the final answers to the nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank. Apr. 10 - Purchase Investments-Dixon Company Stock Cash July 8 - Dividend Cash Dividend Revenue Sept. 10 - Sale Cash Loss on Sale of Investments Investments-Dixon Company Stock

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Expert Solution

Purchase of Investment

Date	General Journal	Debit	Credit
10-Apr	Investments-Dixon Company Stock	$ 210,800.00
	Cash		$ 210,800.00
	(Investment purchase 3400 shares for 209100+1700 )

Receipt of Dividend

8-Jul	Cash	$ 680.00
	Dividend Income		$ 680.00
	(Dividend Received on shares )


Sale of Investment

10-Sep	Cash	$ 125,550.00
	Loss on sale of Investment	$ 17,050.00
	Investments-Dixon Company Stock		$ 142,600.00
	(Sale of Investment)

Working note 1

Cost per Share
Purchase cost of Shares	$ 209,100.00
Add: Brokerage	$ 1,700.00
Net Purchase Cost	$ 210,800.00
Number of Shares Purchased	3400
Cost per Share	$ 62.00

Working note 2

Sale price per Share
Sale of share	$ 126,500.00
Less: Brokerage	$ 950.00
Net Proceeds from Sale	$ 125,550.00
Number of shares Sold	2300
Sale price per Share	$ 54.59

Working note 3

Calculation of value of Shares Sold

Number of Shares sold*Cost per share

(2300*62)

$ 142,600.00

Working note 4

Shares Purchased	3400
Shares Sold	2300
Shares left in Investment	1100

ekkarill92 answered 1 year ago

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