During the fourth quarter of 2018, Harvestology, Inc. generated excess cash, which the company invested in equity
Question:
During the fourth quarter of 2018, Harvestology, Inc. generated excess cash, which the company invested in equity securities as follows:
2018 | |
Nov 17 | Purchased 1,300 common shares as an investment in equity securities, paying $6 per share. Harvestology owns less than 10% of the outstanding stock in the companies in which it invests. |
Dec 19 | Received cash dividend of $0.28 per share on the equity securities. |
Dec 31 | Adjusted the equity securities to fair value of $4 per share. |
Requirements
1. Open T-accounts for Cash (including its beginning balance of $21,000), Investment in Equity Securities, Dividend Revenue, and Unrealized Gain (Loss) on Equity Securities.
2. Journalize the foregoing transactions and post to the T-accounts.
3. Show how to report the short-term investment on Harvestology’s balance sheet at December 31, 2018.
4. Show how to report whatever should appear on Harvestology’s income statement for the year ended December 31, 2018.
5. Harvestology sold the equity securities for $6,500 on January 14, 2019. Journalize the sale.
Balance SheetBalance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
Financial Accounting
ISBN: 978-0134725987
12th edition
Authors: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.