Purchased 3,300 shares of Escalante Corporation common stock (4%) for $200,640 c

Question

Purchased 3,300 shares of Escalante Corporation common stock (4%) for $200,640 cash. Recelved a cash dividend of $3 per share. Sold 660 shares of Escalante Corporation common stock for $42,240 cash. Received a cash dividend of $3 per share. Jan. July 1 1 Dec. 1 Dec. 31 Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit

Explanation / Answer

Calculation of gain of sale of investments :

Purchase price of one share = 200640/3300 = 60.8

Sale of price of each share = 42240 /660 = 64

Difference between sale and purchase price = 64-60.8 = 3.2

Gain on sale of 660 shares = 3.2 * 660 shares = 2112

Date Journal Entry Debit Credit Jan-01 Stock Investments 200640 To Cash 200640 (Purchase of 3300 shares for cash at $200,640) Jul-01 Cash 9900 To Dividend Revenue 9900 (Cash dividend of $3 received per share) Dec-01 Cash 42240 To Stock Investments 40128 To Gain on sale of Stock Investments 2112 (Sale of 660 shares for 42240 ) Dec-31 Cash 7920 To Dividend Revenue 7920 (Dividend received on 2640 [3300-660] shares)

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

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