On February 10, 16,000 shares of Sting Company are acquired at a price of $24 pe

Question

On February 10, 16,000 shares of Sting Company are acquired at a price of $24 per share plus a $160 brokerage commission. On April 12, a $0.40-per-share dividend was received on the Sting Company stock. On May 29, 6,400 shares of the Sting Company stock were sold for $32 per share less a $100 brokerage commission.Prepare the journal entries for the original purchase, the dividend, and the sale under the cost method. Refer to the Chart of Accounts for exact wording of account titles. When required, round your answers to the nearest dollar.

Explanation / Answer

10-Feb Investments-Sting Company Stock 384160 =(16000*24)+160                Cash 384160 12-Apr Cash 6400 =16000*0.4           Dividend revenue 6400 29-May Cash 204700 =(6400*32)-100          Investments-Sting Company Stock 153664 =384160/16000*6400          Gain on Sale of Investments 51036

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