On February 10, 15,000 shares of Sting Company are acquired at a price of $25 pe

Question

On February 10, 15,000 shares of Sting Company are acquired at a price of $25 per share plus a $140 brokerage commission. On April 12, a $0.35-per-share dividend was received on the Sting Company stock. On May 29, 5,200 shares of the Sting Company stock were sold for $31 per share less a $115 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.

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.

PAGE 10

JOURNAL

1

2

3

4

5

6

7

CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 120 Accounts Receivable 121 Allowance for Doubtful Accounts 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Office Supplies 161 Investments-Sting Company Stock 165 Valuation Allowance for Trading Investments 166 Valuation Allowance for Available-for-Sale Investments 181 Land 193 Office Equipment 194 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 231 Interest Payable 241 Salaries Payable EQUITY 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Treasury Stock 332 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 350 Unrealized Gain (Loss) on Available-for-Sale Investments 351 Cash Dividends 352 Stock Dividends 390 Income Summary REVENUE 410 Sales 611 Interest Revenue 612 Dividend Revenue 621 Income of Sting Company 631 Gain on Sale of Investments 641 Unrealized Gain on Trading Investments EXPENSES 511 Cost of Merchandise Sold 512 Bad Debt Expense 516 Cash Short and Over 520 Salaries Expense 531 Advertising Expense 534 Selling Expenses 535 Rent Expense 537 Office Supplies Expense 562 Depreciation Expense-Office Equipment 590 Miscellaneous Expense 710 Interest Expense 721 Loss of Sting Company 731 Loss on Sale of Investments 741 Unrealized Loss on Trading Investments

Explanation / Answer

10-Feb Investment - Sting Company ($25*15,000)+$140) $ 375,140 Cash $ 375,140 12-Apr Cash ($0.35*15,000) $      5,250 Dividend Revenue $      5,250 29-May Cash (5,200*$31)-$115) $ 161,085 Investment - Sting Company ($375,140/15,000*5,200) $ 130,049 Gain on sale of investment $    31,036

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

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