(a) Use the financial statement effects template to record the following four tr
ID: 2422996 • Letter: #
Question
(a) Use the financial statement effects template to record the following four transactions involving investments in marketable securities classified as trading. Please explain answers.
1. Purchased 12,000 common shares of Liu, Inc., at $12 cash per share.
2. Received a cash dividend of $1.10 per common share from Liu.
3. Year-end market price of Liu common stock is $11.25 per share.
4. Sold all 12,000 common shares of Liu for $133,800.
Revenue
-
Expenses
=
Net Income
Using the same transaction information as above, complete the financial statement effects template assuming the investments in marketable securities are classified as available-for-sale.
Revenue
-
Expenses
=
Net Income
3.
Balance Sheet Transaction Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital (1) (2) (3) (4)Explanation / Answer
marketable securities
available-for-sale.
Balance Sheet Transaction Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital -1 -144000 144000 Investment -2 13200 13200 (Retained Earnings) -3 -9000 Investment -9000 (Retained Earnings) -4 133800 -135000 Investment -1200 (Retained Earnings)Related Questions
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