Stein Company had the following transactions pertaining to its short-term stock
ID: 2382042 • Letter: S
Question
Stein Company had the following transactions pertaining to its short-term stock investments. Stein owns more than 20% of the Pine Company stock and has significant influence in decision-making.
Jan. 1
June 1
Sept. 15
Purchased 50,000 shares of Pine Company stock as an investment for $499,750 cash plus brokerage fees of $250.
Received cash dividends of $0.25 per share on the Pine Company stock investment.
Sold 2,000 shares of the Pine Company stock investment for $220,100 less brokerage fees of $100.
Instructions
Journalize the transactions.
DATE
ACCOUNT
DEBIT
CREDIT
DATE
ACCOUNT
DEBIT
CREDIT
Stein Company had the following transactions pertaining to its short-term stock investments. Stein owns more than 20% of the Pine Company stock and has significant influence in decision-making. Jan. 1 June 1 Sept. 15 Purchased 50,000 shares of Pine Company stock as an investment for $499,750 cash plus brokerage fees of $250. Received cash dividends of $0.25 per share on the Pine Company stock investment. Sold 2,000 shares of the Pine Company stock investment for $220,100 less brokerage fees of $100. Instructions Journalize the transactions.Explanation / Answer
Hi,
Please find the answer as follows:
January 1:
Investment in Pine Company Dr. 499750
Brokerage Fees Dr. 250
Cash Cr. 500000
June 1:
Cash (50000*.25) Dr. 12500
Dividend Received (Income from Investment in PIne) Cr. 12500
Sep 15:
Cash Dr. 220000
To Investment in Pine (499750*2000/50000) Cr. 19990
To Brokerage Fees Cr. 100
To Profit on Sale of Investment Cr. 199910
Thanks.
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