This problem continues the Davis Consulting, Inc. situation from Problem P9-42. Davis Consulting invests its temporary excess

Question:

This problem continues the Davis Consulting, Inc. situation from Problem P9-42. Davis Consulting invests its temporary excess cash in a brokerage account. On November 3, 2014, Davis purchased 500 shares of Mauve Co. common stock for $ 20 per share. On December 31, 2014, Mauve’s common stock was trading at $ 19 per share. Assume Davis records the stock as a trading investment.

Requirements

1. Journalize the acquisition of Mauve stock on November 3, 2014.

2. Journalize any entries, if required, at December 31, 2014.

3. On January 25, Davis sold the Mauve stock for $ 20.50 per share. 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...