Theater Arts Company produces and sells theater costumes. The following transactions relate to certain securities acquired by
Question:
Feb. 10 Purchased 4,000 shares of the 150,000 outstanding common shares of Haslam Corporation at 48 per share plus commission and other costs of $168.
June 15 Received the regular cash dividend of $0.70 a share on Haslam Corporation stock.
Dec. 15 Received the regular cash dividend of $0.70 a share plus an extra dividend of $0.05 a share on Haslam Corporation stock.
(Assume that all intervening transactions have been recorded properly and that the number of shares of stock owned have not changed from December 31, 2006, to December 31, 2009.)
2010
Jan. 3 Purchased an influential interest in Jacob, Inc. for $1,250,000 by purchasing 40,000 shares directly from the estate of the founder of Jacob. There are 100,000 shares of Jacob, Inc. stock outstanding.
Apr. 1 Received the regular cash dividend of $0.70 a share and a 2% stock dividend on the Haslam Corporation stock.
July 20 Sold 1,000 shares of Haslam Corporation stock at 41. The broker deducted commission and other costs of $50, remitting the balance.
Dec. 15 Received a cash dividend at the new rate of $0.80 a share on the Haslam Corporation stock.
Dec. 31 Received $40,000 of cash dividends on Jacob, Inc., stock. Jacob, Inc., reported net income of $295,000 in 2010. Theater Arts uses the equity method of accounting for its investment in Jacob, Inc.
Instructions
Journalize the entries for the preceding transactions.
Broker
A broker is someone or something that acts as an intermediary third party, managing transactions between two other entities. A broker is a person or company authorized to buy and sell stocks or other investments. They are the ones responsible for... 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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2006 Feb 10 Investment in Haslam Corporation Stock 192168 Cash 192168 June 15 ...View the full answer
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