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Yerbury Corp. manufactures construction equipment. Journalize the entries to record the following selected equity investment transactions...

Yerbury Corp. manufactures construction equipment.

Journalize the entries to record the following selected equity investment transactions completed by Yerbury during 2016. Refer to the Chart of Accounts for exact wording of account titles. When required, round your answers to the nearest dollar.

Feb. 2 Purchased for cash 5,100 shares of Wong Inc. stock for $18 per share plus a $110 brokerage commission.
Mar. 6 Received dividends of $0.35 per share on Wong Inc. stock.
June 7 Purchased 2,000 shares of Wong Inc. stock for $25 per share plus a $130 brokerage commission.
July 26 Sold 6,200 shares of Wong Inc. stock for $36 per share less a $110 brokerage commission. Yerbury assumes that the first investments purchased are the first investments sold.
Sept. 25 Received dividends of $0.50 per share on Wong Inc. stock.

Chart of Accounts

CHART OF ACCOUNTS
Yerbury Corp.
General Ledger
ASSETS
110 Cash
111 Petty Cash
120 Accounts Receivable
121 Allowance for Doubtful Accounts
131 Notes Receivable
132 Interest Receivable
141 Merchandise Inventory
145 Office Supplies
146 Store Supplies
151 Prepaid Insurance
161 Investments-Wong Inc. Stock
165 Valuation Allowance for Trading Investments
166 Valuation Allowance for Available-for-Sale Investments
181 Land
191 Store Equipment
192 Accumulated Depreciation-Store Equipment
193 Office Equipment
194 Accumulated Depreciation-Office Equipment
LIABILITIES
210 Accounts Payable
221 Notes Payable
231 Interest Payable
241 Salaries Payable
251 Sales Tax Payable
EQUITY
311 Common Stock
312 Paid-In Capital in Excess of Par-Common Stock
321 Preferred Stock
322 Paid-In Capital in Excess of Par-Preferred Stock
331 Treasury Stock
332 Paid-In Capital from Sale of Treasury Stock
340 Retained Earnings
350 Unrealized Gain (Loss) on Available-for-Sale Investments
351 Cash Dividends
352 Stock Dividends
390 Income Summary
REVENUE
410 Sales
611 Interest Revenue
612 Dividend Revenue
621 Income of Wong Inc.
631 Gain on Sale of Investments
641 Unrealized Gain on Trading Investments
EXPENSES
511 Cost of Merchandise Sold
512 Bad Debt Expense
515 Credit Card Expense
516 Cash Short and Over
520 Salaries Expense
531 Advertising Expense
532 Delivery Expense
533 Repairs Expense
534 Selling Expenses
535 Rent Expense
536 Insurance Expense
537 Office Supplies Expense
538 Store Supplies Expense
561 Depreciation Expense-Store Equipment
562 Depreciation Expense-Office Equipment
590 Miscellaneous Expense
710 Interest Expense
721 Loss of Wong Inc.
731 Loss on Sale of Investments
741 Unrealized Loss on Trading Investments

Journal

Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles. When required, round your answers to the nearest dollar..

PAGE 10

JOURNAL

DATE DESCRIPTION POST. REF. DEBIT CREDIT

1

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Solutions

Expert Solution

Solution:

Journal Entries - Yerbury Corp.
Date Particulars Debit Credit
2-Feb Investment - Wong Inc. Stock Dr (5100*$18 + $110) $91,910.00
      To Cash $91,910.00
(Being investment made in Wong Inc stock)
6-Mar Cash Dr $1,785.00
      To Dividend Revenue (5100*$0.35) $1,785.00
(Being dividend received on Wong Inc stock)
7-Jun Investment - Wong Inc. Stock Dr (2000*$25 + $130) $50,130.00
      To Cash $50,130.00
(Being investment made in Wong Inc stock)
26-Jul Cash Dr (6200*$36 - $110) $223,090.00
      To Investment - Wong Inc. Stock [$91,910 + ($50,130*1100/2000)] $119,481.50
      To Gain on sales of investment $103,608.50
25-Sep Cash Dr $450.00
      To Dividend Revenue (900*$0.50) $450.00
(Being dividend received on Wong Inc stock)

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