During the year ended December 31, 2015, McCormick Inc. had the following transactions for its trading investments:
Question:
During the year ended December 31, 2015, McCormick Inc. had the following transactions for its trading investments:
Jan. 1 ........ Purchased 2,000 Starr Corporation $5, preferred shares for $210,000 cash.
Apr. 1 ....... Received quarterly cash dividend.
July 1 ........ Received quarterly cash dividend.
......2 ........Sold 500 Starr shares for $57,000 cash.
Oct. 1 ........Received quarterly cash dividend.
Nov. 22 .....Starr declared the quarterly dividend on November 22, to preferred shareholders ...............of record on December 15, payable on January 1.
Dec. 31 .....Starr's shares were trading at $115 per share.
Instructions
(a) Record the above transactions, using the fair value through profit or loss model.
(b) Prepare any required adjusting entries at December 31. If no adjusting entries are required, explain why.
(c) On February 15, 2016, McCormick sold 500 Starr shares for $117 per share. Record the sale of the shares?
CorporationA 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...
Step by Step Answer:
a Jan 0 1 Trading Investments 210000 Cash 210000 Apr 1 Cash 2000 ...View the full answer
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118644942
6th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
