On December 31, 2017, Turnball Associates owned the following securities, held as a long-term...

Question:

On December 31, 2017, Turnball Associates owned the following securities, held as a long-term investment. The securities are not held for influence or control of the investee.

Common Stock Shares Cost
Gehring Co. 2,160 $69,120
Wooderson Co. 4,920 44,280
Kitselton Co. 1,640 36,080

On December 31, 2017, the total fair value of the securities was equal to its cost. In 2018, the following transactions occurred:

Aug. 1 Received SOSO per share ca dividend on Gehring co. common stock.
Sept. 1 Sold 1,476 shares of Wooderson Co. common stock for cash at $8 per share.
Oct. 1 Sold 864 shares of Gehring Co. common stock for cash at $35 per share.
Nov. 1 Received $2 per share cash dividend on Kitselton Co. common stock.
Dec. 15 Received $0.50 per share cash dividend on Gehring Co. common stock.
Dec. 31 Received $2 per share annual cash dividend on Wooderson Co. common stock.

At December 31, the fair values per share of the common stocks were: Gehring Co. $34, Wooderson Co. $8, and Kitselton Co. $20.

Journalize the 2018 transactions and post to the account Stock Investments.

Stock Investment:

Stock investment is the investment that is made by the investor in the stock of the companies for getting the dividend that is a return on the investment for them. It increases the income and the assets of the investors.

Answer and Explanation:

Date Particular Debit $ Credit $
1-Sep Cash (1,476 x $8) 11,808
Loss on sale of stock investment 1,476
Stock investment ((44,280 / 4,920) x 1,476) 13,284
(Recorded sale of stock investment)
1-Oct Cash (864 x 35) 30,240
Stock investment ((69,120 / 2,160) x 864 27,648
Gain on sale of stock investment 2,592
(Recorded sale of stock investment)
1-Nov Cash (1640 x 2) 3,280
Dividend revenue 3,280
(Recorded the dividend revenue)
15-Dec Cash ((2,160 - 864) x 0.50) 648
Dividend revenue 648
(Recorded dividend revenue)
31-Dec Cash ((4920 - 1476) x 2) 6,888
Dividend revenue 6,888
(Recorded dividend revenue)

Stock investment account
Date Particular Debit Amount $ Date Particular Credit  Amount $
2018 2018
1-Jan Balance 149,480 1-Sep cash 13,284
1-Oct Cash 27,648
31-Dec Ending Balance 108,548


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