Question

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

Answer 1

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