1. On November 28, 20x7, Barrett Company purchased 20,000 shares of HAL Corporation common stock for...

1. On November 28, 20x7, Barrett Company purchased 20,000 shares of HAL Corporation common stock for $360,000. Barrett's management intends to hold the shares for a short period of time. On December 31, 20x7, the price of HAL stock was $15 per share. Finally, on January 19, 20x8, Barrett sells all 20,000 shares for $375,000. Prepare Barrett's journal entries for November 28, December 31, and January 19.

Expert Solution


Journal entries

Event	Dr/Cr	Particulars	Debit $	Credit $
November 28 20x7	Debit	Investment in HAL Corporation	360,000
	Credit	Cash/Bank		360,000
		(To record the purchase of equity shares of HAL Corporation for short term purpose)
		=20,000 shares at $ 18 per share

December 31, 20x7	Debit	Unrealized loss on revaluation	60,000
	Credit	Investment in HAL Corporation		60,000
		(To record the revaluation of short term investment at the end of reporting period which will go to the income statement)
Please note that short term investment gain or loss will go to income statement

January 19, 20x8	Debit	Cash/Bank	375,000
	Credit	Gain on sale of investments		75,000
	Credit	Investment in HAL Corporation		300,000
		(To record the sale of investment in HAL corporation and gain on sale of investment)

ekkarill92 answered 11 months ago

3. On November 19, 20x7, Lassen Company purchased 30,000 shares of JCN Corporation stock for $480,000,...

3. On November 19, 20x7, Lassen Company purchased 30,000 shares of JCN Corporation stock for $480,000, and 10,000 shares of Canoga Corporation stock for $250,000. Lassen's management intends to hold all 40,000 shares for a short period of time. On December 31, 20x7, the price of JCN's stock was $13 per share, and the price of the Canoga stock was $30 per share. Finally, on January 27, 20x8, Lassen sold all 10,000 shares of Canoga stock for $320,000. In the...

Bluth, Inc., purchased 100% of the common shares of Horten for $280,000 on January 1, 20X7....

Bluth, Inc., purchased 100% of the common shares of Horten for $280,000 on January 1, 20X7. Horten's balance sheet just before the acquisition was as follows ($ in thousands): BALANCE SHEET: Cash $100 Net fixed assets $ 190 Total assets $290 Liabilities $200 Stockholders' equity $90 Total L&SE $290 Requirement 1: Compute the amount of goodwill Bluth would recognize on this purchase. Where would this goodwill appear on Bluth's financial statements? Requirement 2: Bluth's 20X7 net income from all operations...

2. On January 1, 20X8, Ball Corporation purchased shares of Leftwich Company common Stock. a. Assume...

2. On January 1, 20X8, Ball Corporation purchased shares of Leftwich Company common Stock. a. Assume the stock acquired by Ball represents 15% of Leftwich’s voting stock and that Ball has no influence over Leftwich’s business decisions. Use the financial statement effects template (with amounts and accounts) to record the following transactions. i. Ball purchased 5,000 common shares of Leftwich at $15 cash per share. ii. Leftwich reported annual net income of $40,000. iii. Ball received a cash dividend of...

(A) Corporation acquired 20,000 of the 100,000 outstanding common shares of (B) Company on January 1,...

(A) Corporation acquired 20,000 of the 100,000 outstanding common shares of (B) Company on January 1, 2016, for a cash consideration of $200,000. During 2016, (B) Company had net income of $120,000 and paid dividends of $80,000. At the end of 2016, shares of (B) Company were trading for $11 each. During 2017, (B) Company had a loss of $60,000 and paid dividends of $40,000. Income for the first half of the year was $80,000 and the loss in the...

8) On April 1, the Prakash Corporation issued 20,000 shares of $2 par value common stock...

8) On April 1, the Prakash Corporation issued 20,000 shares of $2 par value common stock at $23 per share. Please write the journal entry: 9) On April 10, a company acquired land in exchange for 1,000 shares of $20 par common stock with a current fair-market price of $66 per share. Please write the journal entry:

Larry holds 2,000 shares of common stock in a company that only has 20,000 shares outstanding....

Larry holds 2,000 shares of common stock in a company that only has 20,000 shares outstanding. The company’s stock currently is valued at $48.00 per share. The company needs to raise new capital to invest in production. The company is looking to issue 5,000 new shares at a price of $38.40 per share. Larry worries about the value of his investment. 1. Larry’s current investment in the company is ?. 2. If the company issues new shares and Larry makes...

Recording Common and Preferred Stock Transactions Gilmore Company has 20,000 authorized shares of common stock, $2...

Recording Common and Preferred Stock Transactions Gilmore Company has 20,000 authorized shares of common stock, $2 par, and also 20,000 authorized shares of preferred stock, $10 par. Required Record journal entries for the following separate transactions. Analyze and record each transaction separately. a. On January 1, 2020, Gilmore sold 720 shares of common stock and 360 shares of preferred stock for a lump sum of $22,140. The common stock had been selling during the current week at $25 per share,...

On January 2, 2018, Baltimore Company purchased 20,000 shares of the stock of Towson Company at...

On January 2, 2018, Baltimore Company purchased 20,000 shares of the stock of Towson Company at $12 per share. Baltimore obtained significant influence as the purchase represents a 40% ownership stake in Towson Company. On August 1, 2018, Towson Company paid cash dividends of $15,000. Baltimore Company intended this investment to a long-term investment. On December 31, 2018, Towson Company reported $50,000 of net income for FY 2018. Additionally, the current market price for Towson Company's stock increased to $22...

On August 1, 2018 Adrian purchased 1,000 shares of Actovision Corporation common stock for $50,000. On...

On August 1, 2018 Adrian purchased 1,000 shares of Actovision Corporation common stock for $50,000. On November 1, 2018, Adrian sold her 1,000 shares of Actovision Corporation common stock for $40,000. On November 15, 2018, Adrian repurchased 800 shares of Actovision Corporation common stock for $28,000. What is Adrian’s realized and recognized gain or loss on the November 1, 2018 sale of her Actovision Corporation common stock. Please show your work and explain your calculations. What is her basis in...

On January 1, 2020, Fisher Corporation purchased 40 percent (80,000 shares) of the common stock of...

On January 1, 2020, Fisher Corporation purchased 40 percent (80,000 shares) of the common stock of Bowden, Inc., for $978,000 in cash and began to use the equity method for the investment. The price paid represented a $66,000 payment in excess of the book value of Fisher's share of Bowden's underlying net assets. Fisher was willing to make this extra payment because of a recently developed patent held by Bowden with a 15-year remaining life. All other assets were considered...

Question