Rose Company had no short-term investments prior to year 2017. It had the follow

Question

Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.

Received a $1.30 per share cash dividend on the PepsiCo shares.

Purchased 10,000 shares of Gem Co. stock at $25.00 per share plus a $400 brokerage fee.

Note: Enter debits before credits.

Paid $280,000 to buy 3-month U.S. Treasury bills (debt securities): $280,000 principle amount, 5% interest, securities mature on July 31.

Note: Enter debits before credits.

Purchased 5,000 shares of PepsiCo stock at $49.00 per share plus a $370 brokerage fee.

Note: Enter debits before credits.

Purchased 2,500 shares of Xerox stock at $15.00 per share plus a $450 brokerage fee.

Note: Enter debits before credits.

Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 29.

Note: Enter debits before credits.

Received an $0.85 per share cash dividend on the Gem Co. stock.

Note: Enter debits before credits.

Sold 5,000 shares of Gem Co. stock at $31.75 per share less a $490 brokerage fee.

Note: Enter debits before credits.

Received a $2.00 per share cash dividend on the PepsiCo shares.

Note: Enter debits before credits.

Received a $1.00 per share cash dividend on the remaining Gem Co. shares.

Note: Enter debits before credits.

Received a $1.30 per share cash dividend on the PepsiCo shares.

Note: Enter debits before credits.

Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.

Apr. 16 Purchased 10,000 shares of Gem Co. stock at $25.00 per share plus a $400 brokerage fee. May 1 Paid $280,000 to buy 3-month U.S. Treasury bills (debt securities): $280,000 principle amount, 5% interest, securities mature on July 31. July 7 Purchased 5,000 shares of PepsiCo stock at $49.00 per share plus a $370 brokerage fee. 20 Purchased 2,500 shares of Xerox stock at $15.00 per share plus a $450 brokerage fee. Aug. 1 Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31. 15 Received a(n) $0.85 per share cash dividend on the Gem Co. stock. 28 Sold 5,000 shares of Gem Co. stock at $31.75 per share less a $490 brokerage fee. Oct. 1 Received a $2.00 per share cash dividend on the PepsiCo shares. Dec. 15 Received a $1.00 per share cash dividend on the remaining Gem Co. shares. 31

Received a $1.30 per share cash dividend on the PepsiCo shares.

Purchased 10,000 shares of Gem Co. stock at $25.00 per share plus a $400 brokerage fee.

Note: Enter debits before credits.

Date General Journal Debit Credit Apr 16, 2017

Paid $280,000 to buy 3-month U.S. Treasury bills (debt securities): $280,000 principle amount, 5% interest, securities mature on July 31.

Note: Enter debits before credits.

Date General Journal Debit Credit May 01, 2017

Purchased 5,000 shares of PepsiCo stock at $49.00 per share plus a $370 brokerage fee.

Note: Enter debits before credits.

Date General Journal Debit Credit Jul 07, 2017

Purchased 2,500 shares of Xerox stock at $15.00 per share plus a $450 brokerage fee.

Note: Enter debits before credits.

Date General Journal Debit Credit Jul 20, 2017

Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 29.

Note: Enter debits before credits.

Date General Journal Debit Credit Aug 01, 2017

Received an $0.85 per share cash dividend on the Gem Co. stock.

Note: Enter debits before credits.

Date General Journal Debit Credit Aug 15, 2017

Sold 5,000 shares of Gem Co. stock at $31.75 per share less a $490 brokerage fee.

Note: Enter debits before credits.

Date General Journal Debit Credit Aug 28, 2017

Received a $2.00 per share cash dividend on the PepsiCo shares.

Note: Enter debits before credits.

Date General Journal Debit Credit Oct 01, 2017

Received a $1.00 per share cash dividend on the remaining Gem Co. shares.

Note: Enter debits before credits.

Date General Journal Debit Credit Dec 15, 2017

Received a $1.30 per share cash dividend on the PepsiCo shares.

Note: Enter debits before credits.

Date General Journal Debit Credit Dec 31, 2017

Explanation / Answer

SOLUTION

Date Account titles and Explanations Debit ($) Credit ($) April 16 Short ­term investments- AFS (Gem) 250,400 Cash [(10,000 *$25) + $400] 25,400 May 1 Short ­term investments- AFS (T bills) 280,000 Cash 280,000 July 7 Short ­term investments- AFS (pepsi) 245,370 Cash[(5,000 *$49) + $370] 245,370 July 20 Short ­term investments- AFS (Xerox) 37,950 Cash[(2,500 *$15) + $450] 37,950 Aug.1 Cash 283,500 Short ­term investments- AFS (T bills) 280,000 Interest Revenue ($280,000*5%*3/12) 3,500 Aug.15 Cash ($0.85 * 10,000) 8,500 Dividend revenue 8,500 Aug.28 Cash [(5,000*$31.75)-$490] 158,260   Short ­term investments- AFS [(5,000*$25)+$200] 125,200 Gain on sale of short ­term investments 33,060 Oct.1 Cash 10,000 Dividend revenue ($2.00*5,000) 10,000 Dec.15 Cash 5,000   Dividend revenue ($1.00*5,000) 5,000 Dec. 31 Cash 6,500 Dividend revenue ($1.30*5,000) 6,500

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

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