Entries for Equity Investments: Less than 20% Ownership On February 22, Triangle Corporation acquired 34,000 shares...

Entries for Equity Investments: Less than 20% Ownership

On February 22, Triangle Corporation acquired 34,000 shares of the 500,000 outstanding common stock of Jupiter Co. at $25 plus commission charges of $680. On June 1, a cash dividend of $1.70 per share was received. On November 12, 7,000 shares were sold at $31 less commission charges of $100. At the end of the accounting period on December 31, the fair value of the remaining 27,000 shares of Jupiter Company’s stock was $25.52 per share.

In your computations, round per share amounts to two decimal places. When required, round final answers to the nearest dollar.

a. Using the cost method, journalize the entry for the purchase of stock. If an amount box does not require an entry, leave it blank.

Feb. 22	Investments-Jupiter Co. Stock	fill in the blank 1667110a206dfed_2	fill in the blank 1667110a206dfed_3
	Cash	fill in the blank 1667110a206dfed_5	fill in the blank 1667110a206dfed_6

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a. When recording the purchase of the investment, consider the amount of the brokerage commission.

b. Using the cost method, journalize the entry for the receipt of dividends. If an amount box does not require an entry, leave it blank.

June 1	Cash	fill in the blank 6a7755068075014_2	fill in the blank 6a7755068075014_3
	Dividend Revenue	fill in the blank 6a7755068075014_5	fill in the blank 6a7755068075014_6

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b. Record the revenue earned.

c. Using the cost method, journalize the entry for the sale of 7,000 shares. If an amount box does not require an entry, leave it blank.

Nov. 12	Cash	fill in the blank be3f49fb1079f8b_2	fill in the blank be3f49fb1079f8b_3
	Gain on Sale of Investments	fill in the blank be3f49fb1079f8b_5	fill in the blank be3f49fb1079f8b_6
	Investments-Jupiter Co. Stock	fill in the blank be3f49fb1079f8b_8	fill in the blank be3f49fb1079f8b_9

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c. When recording the cash received, consider the commission. To complete the entry determine and gain or loss to be recorded.

d. Using the cost method, journalize the entry for the change in fair value. If an amount box does not require an entry, leave it blank.

Dec. 31	Valuation Allowance for Equity Investments	fill in the blank 792dfff2bfb7060_2	fill in the blank 792dfff2bfb7060_3
	Unrealized Gain on Equity Investments	fill in the blank 792dfff2bfb7060_5	fill in the blank 792dfff2bfb7060_6

Solutions

Expert Solution

JOURNAL
Sl. No.	Date	Particulars	Dr. ($)	Cr. ($)
a.	Feb-22	Investments - Jupiter Co. Stock [34,000*25]	8,50,000
		Commission Charges	680
		To Cash		8,50,680

b.	Jun-01	Cash [34,000*1.70]	57,800
		To Dividend Revenue		57,800

c.	Nov-12	Cash [7,000*31-100]	2,16,900
		To Gain on Sale of Investments [216,900-175,000]		41,900
		To Investments - Jupiter Co. Stock [7,000*25]		1,75,000

d.	Dec-31	Valuation Allowance for Equity Investments [27,000*0.52]	14,040
		To Unrealized Gain on Equity Investments		14,040

ekkarill92 answered 7 months ago

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