8 pts. Louie Corp. invests in the publicly traded stock of Precision Instruments, Inc. Record the following transactions in the financial statements effects template below.
1) Purchased 1,000 shares of Precision Instruments’ common stock for $43 per share. Wichita classifies these securities as available-for-sale.
2) Received a cash dividend of $1.10 per share from Precision
3) Year-end market price of Precision common stock is $48 per share
4) Sold all 1,000 shares for $55 per share, the closing price for the day
Balance Sheet
Transacti
on
1)
2)
3)
4)
Cash
Asset
+
Noncash
Assets
=
=
=
=
=
Liabilities
Income Statement
+
Contrib.
Capital
+
Earned
Capital
Revenues
–
–
–
–
–
Expenses
=
=
=
=
=
Net
Income
8 pts. Doug Portland Coffee Co invests in the stock of Classic Cup, Inc. Record the following transactions in the financial statements effects template below.
1) Purchased 6,000 shares of Classic Cup Inc. common stock for $10 per; these shares represent 25% ownership of Classic Cup, which conveys to Portland Coffee significant influ
2) Received a cash dividend of $2.20 per share from Classic Cup, Inc.
3) Classic Cup reports net income of $100,000.
4) Sold all 6,000 shares of Classic Cup for $87,000.
Balance Sheet
Transacti
on
1)
2)
3)
4)
Cash
Asset
+
Noncash
Assets
=
=
=
=
=
Liabilities
Income Statement
+
Contrib.
Capital
+
Earned
Capital
Revenues
–
–
–
–
–
Expenses
=
=
=
=
=
Net
Income
nfluence over the operations of Classic Cup.
8 pts. Computers-R-Us (CRU) purchased 30 computers from its supplier on credit at a cost of $1,500 per computer. The computers were purchased to be held for
sale to customers. By the end of the month, CRU had sold all 30 computers for $1,700 each. The store received payment for these computers but waited until the
end of the month to settle its account payable with the supplier. Use the financial statement effects template, below to record these transactions.
Balance Sheet
Transaction
Purchase computers
Sell Computers
Record Cost of Goods Sold
Pay for computers
Cash
Asset
+
Noncash
Assets
=
=
=
=
=
Liabilities
Income Statement
+
Contrib.
Capital
+
Earned
Capital
Revenues
–
–
–
–
–
Expenses
=
=
=
=
=
Net
Income
