During 2012, Kakisa Financial Corporation had the following trading investment transactions: Feb. 1 Purchased 600 CBF common

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During 2012, Kakisa Financial Corporation had the following trading investment transactions:
Feb. 1 Purchased 600 CBF common shares for $36,000.
Mar. 1 Purchased 800 RSD common shares for $24,000.
Apr. 1 Purchased 7% MRT bonds at face value, for $60,000. Interest is received semi-annually on April 1 and October 1.
July 1 Received a cash dividend of $3 per share on the CBF common shares.
Aug. 1 Sold 200 CBF common shares at $58 per share.
Sept. 1 Received a cash dividend of $1.50 per share on the RSD common shares.
Oct. 1 Received the semi-annual interest on the MRT bonds.
1 Sold the MRT bonds for $62,000.
Dec. 31 The market prices of the CBF and RSD common shares were $55 and $31 per share, respectively.
Instructions
(a) Record the above transactions, including required adjusting entries (if any).
(b) Show how the investments would be presented on the statement of financial position at December 31, 2012.
(c) Determine the balance in each of the income statement accounts that are affected in the transactions above and indicate how they would be presented on the income statement for the year ended December 31, 2012.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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...
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Financial Accounting Tools for Business Decision Making

ISBN: 978-1118024492

5th Canadian edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine

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