36. Ana’s Financial Services, Inc. invested $30,000 to acquire 6,250 shares of A

Question

36. Ana’s Financial Services, Inc. invested $30,000 to acquire 6,250 shares of Amber’s Investments, Inc. on March 15, 2013. This investment represents less than 20% of the investee's voting stock. On May 7, 2018, Ana’s sells 2,000 shares of Amber’s Investments for $21,250. Which of the following is the correct journal entry for the May 7, 2018 transaction? A) Gain on Disposal 21,250 Long-term Investments—Available-for-Sale 21,250 B) Cash 21,250 Gain on Disposal 21,250 C) Cash 21,250 Long-term Investments—Available-for-Sale 9,600 Gain on Disposal 11,650 D) Cash 21,250 Long-term Investments—Available-for-Sale 21,250

Explanation / Answer

Journal entry :

So answer is c) Cash 21,250 Long-term Investments—Available-for-Sale 9,600 Gain on Disposal 11,650

Date account and explanation debit credit Cash 21250 Gain on disposal 11650 Long term investment-available for sale (30000/6250*2000) 9600

Related Questions

Navigate

• Browse (All)
• Browse 3
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.