Question: Barry Hank and Babe form a company named Long Ball

Barry, Hank, and Babe form a company named Long Ball Investments, hoping to find that elusive home run stock. A new clothing company by the name of Major League Apparel has caught their eye. Major League Apparel has two classes of stock authorized: 5%, $ 10 par preferred and $ 1 par value common. Long Ball Investments has the following transactions during the year. None of the investments are large enough to exert a significant influence.
January 2 Purchase 1,500 shares of Major League common stock for $ 70 per share.
February 14 Purchase 600 shares of Major League preferred stock for $ 12 per share.
May 15 Sell 300 shares of Major League’s common stock for $ 62 per share.
December 30 Receive a cash dividend on Major League’s common stock of $ 0.50 per share and preferred stock of $ 0.50 per share.
December 31 The fair values of the common and preferred shares are $ 73 and $ 14, respectively.

1. Record each of these investment transactions.
2. Calculate the balance in the Investments account as of December 31.

View Solution:

Sale on SolutionInn
  • CreatedJuly 15, 2014
  • Files Included
Post your question