Prepare journal entries to record the following transactionsinvolving both the short-term and long-term investments of SophiaCorp., all of which occurred during calendar year 2011. Use theaccount Short-Term Investments for any transactions that youdetermine are short term.
a.
On February 15, paid $150,000 cash to purchase American General's120-day short-term notes at par, which are dated February 15 andpay 10% interest (classified as held-to-maturity).
b.
On March 22, bought 700 shares of Frain Industries common stock at$25 cash per share plus a $250 brokerage fee (classified aslong-term available-for-sale securities).
c.
On May 15, received a check from American General in payment of theprincipal and 120 days' interest on the notes purchased intransaction a.
d.
On July 30, paid $50,000 cash to purchase MP3 Electronics' 8% notesat par, dated July 30, 2011, and maturing on January 30, 2012(classified as trading securities).
e.
On September 1, received a $0.50 per share cash dividend on theFrain Industries common stock purchased in transactionb.
f.
On October 8, sold 350 shares of Frain Industries common stock for$32 cash per share, less a $175 brokerage fee.
g.
On October 30, received a check from MP3 Electronics for threemonths' interest on the notes purchased in transactiond.
Prepare journal entries to record the following transactionsinvolving both the short-term and long-term investments of SophiaCorp., all of which occurred during calendar year 2011. Use theaccount Short-Term Investments for any transactions that youdetermine are short term.
a.
On February 15, paid $150,000 cash to purchase American General's120-day short-term notes at par, which are dated February 15 andpay 10% interest (classified as held-to-maturity).
b.
On March 22, bought 700 shares of Frain Industries common stock at$25 cash per share plus a $250 brokerage fee (classified aslong-term available-for-sale securities).
c.
On May 15, received a check from American General in payment of theprincipal and 120 days' interest on the notes purchased intransaction a.
d.
On July 30, paid $50,000 cash to purchase MP3 Electronics' 8% notesat par, dated July 30, 2011, and maturing on January 30, 2012(classified as trading securities).
e.
On September 1, received a $0.50 per share cash dividend on theFrain Industries common stock purchased in transactionb.
f.
On October 8, sold 350 shares of Frain Industries common stock for$32 cash per share, less a $175 brokerage fee.
g.
On October 30, received a check from MP3 Electronics for threemonths' interest on the notes purchased in transactiond.
Related questions
Prepare journal entries to record the following transactionsinvolving the short-term securities investments of Natura Co., allof which occurred during year 2015. |
| a. | On June 15, paid $122,000 cash to purchase Remedyâs 90-dayshort-term debt securities ($122,000 principal), dated June 15,that pay 9% interest (categorized as held-to-maturitysecurities). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| b. | On September 16, received a check from Remedy in payment of theprincipal and 90 days' interest on the debt securities purchased intransaction a. (Use 360 days in a year. Do notround your intermediate calculations.) Journal Entry Worksheet On June 15, paid $122,000 cash to purchase Remedyâs 90-dayshort-term debt securities ($122,000 principal), dated June 15,that pay 9% interest (categorized as held-to-maturitysecurities). On September 16, received a check from Remedy in payment of theprincipal and 90 days' interest on the debt securities purchased intransaction a.
*Enter debits before credits Journal Entry Worksheet On June 15, paid $122,000 cash to purchase Remedyâs 90-dayshort-term debt securities ($122,000 principal), dated June 15,that pay 9% interest (categorized as held-to-maturitysecurities). On September 16, received a check from Remedy in payment of theprincipal and 90 days' interest on the debt securities purchased intransaction a.
*Enter debits before credits |
1) On January 4, Year 1, Barber Company purchased 7,500 sharesof Convell Company for $84,500 plus a broker's fee of $1,500.Convell Company has a total of 37,500 shares of common stockoutstanding and it is presumed the Barber Company will have asignificant influence over Convell. During each of the next twoyears, Convell declared and paid cash dividends of $0.85 per share,and its net income was $97,000 and $92,000 for Year 1 and Year 2,respectively. What is the book value of Barber's investment inConvell at the end of Year 2?
A) $111,050.
B) $86,000.
C) $122,800.
D) $73,250.
E) $123,800.
2) The accountant for Crusoe Company is preparing the company'sstatement of cash flows for the fiscal year just ended. Thefollowing information is available:
| Retained earningsbalance at the beginning of the year | $ | 128,500 |
| Cash dividends declared for theyear | 48,500 | |
| Proceeds from the sale ofequipment | 83,500 | |
| Gain on the sale ofequipment | 7,500 | |
| Cash dividends payable at thebeginning of the year | 20,500 | |
| Cash dividends payable at theend of the year | 23,000 | |
| Net income for the year | 94,500 | |
The amount of cash dividends paid during the year would be:
A) $253,000.
B) $179,000.
C) $46,000.
D) $258,500.
E) $281,000.
3) On February 15, Jewel Company buys 6,500 shares of MarceloCorp. common stock at $28.68 per share plus a brokerage fee of$475. The stock is classified as long-term available-for-salesecurities. This is the companyâs first and only investment inavailable-for-sale securities. On March 15, Marcelo declares adividend of $1.30 per share payable to stockholders of record onApril 15. Jewel received the dividend on April 15 and ultimatelysells half of the Marcelo stock on November 17 of the current yearfor $29.45 per share less a brokerage fee of $325. The journalentry to record the purchase on February 15 is:
A) Debit Long-Term Investments-AFS $186,420; credit Cash$186,420.
B) Debit Long-Term Investments-Trading $186,895; credit Cash$186,895.
C) Debit Long-Term Investments-HTM $191,425; credit cash$191,425.
D )Debit Long-Term Investments-AFS $186,895; credit Cash$186,895.
E) Debit Long-Term Investments-Trading $186,420; credit Cash$186,420.
4) Jeffreys Company reports depreciation expense of $58,000 forYear 2. Also, equipment costing $194,000 was sold for a $11,800loss in Year 2. The following selected information is available forJeffreys Company from its comparative balance sheet. Compute thecash received from the sale of the equipment.
| At December 31 | Year 2 | Year 1 | ||||
| Equipment | $ | 700,000 | $ | 894,000 | ||
| AccumulatedDepreciation-Equipment | 500,000 | 590,000 | ||||
A) $57,800.
B) $34,200.
C) $78,200.
D) $46,000.
E) $58,000.
5) Use the following information to compute the cost of goodsmanufactured. Assume that all raw materials used were traceable tospecific units of product.
| Beginning rawmaterials | $ | 6,700 | |
| Ending raw materials | 5,200 | ||
| Direct labor | 13,450 | ||
| Raw material purchases | 8,600 | ||
| Depreciation on factoryequipment | 7,700 | ||
| Factory repairs andmaintenance | 4,500 | ||
| Beginning finished goodsinventory | 11,400 | ||
| Ending finished goodsinventory | 10,100 | ||
| Beginning work in processinventory | 6,900 | ||
| Ending work in processinventory | 7,500 |
A) $35,750.
B) $35,150.
C) $36,650.
D) $36,350.
E) $42,650.
6) Memphis Company anticipates total sales for April, May, andJune of $830,000, $930,000, and $980,000 respectively. Cash salesare normally 30% of total sales. Of the credit sales, 30% arecollected in the same month as the sale, 65% are collected duringthe first month after the sale, and the remaining 5% are collectedin the second month. Compute the amount of accounts receivablereported on the companyâs budgeted balance sheet for June 30.
$480,200.
$543,900.
$512,750.
$851,950.
$922,950.
7) Landmark Corp. buys $400,000 of Schroeter Company's 7%,5-year bonds payable at par value on September 1. Interest paymentsare made semiannually. Landmark plans to hold the bonds for the5-year life. When the bonds mature, the journal entry to record theproceeds will be:
A) Debit Cash $400,000; credit Interest Receivable $400,000.
B) Debit Cash $400,000; credit Long-Term Investments-HTM$400,000.
C) Debit Cash $400,000; credit Interest Revenue $400,000.
D) Debit Cash $400,000; credit Bonds Payable $400,000.
E) Debit Long-Term Investments-HTM $400,000; credit Cash$400,000.
