During the fourth quarter of 20X8, the operations of Norris Carpet Center generated excess cash, which the

Question:

During the fourth quarter of 20X8, the operations of Norris Carpet Center generated excess cash, which the company invested in securities, as follows:

Dec. 10 Purchased 2,000 shares of common stock as a trading investment, paying $15 per share.

17 Received cash dividend of $0.60 per share on the trading investment.

31 Adjusted the trading investment to its market value of $34,000.

Required

1. Prepare T-accounts for Cash, balance of $85,000; Short-Term Investment; Dividend Revenue; and Unrealized Gain on Investment (or Unrealized Loss on Investment).

2. Show how to report the short-term investment on Norris's balance sheet at December 31.

3. Show how to report whatever should appear on Norris's income statement.

4. On January 6, 20X9, Norris sold the trading investment for $29,000. Journalize the sale.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance 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...