Entries for Investment in Stock, Receipt of Dividends, and Sale of Shares The fo
ID: 2395503 • Letter: E
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
Explanation / Answer
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
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)
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