1 answer

Present entries to record the following selected transactions of Masterson Co. Aug. 1 Purchased 600 shares...

Question:

  1. Present entries to record the following selected transactions of Masterson Co.

    Aug. 1 Purchased 600 shares of the 100,000 shares outstanding $10 par common shares of Dankin Corporation for $5,100.
    1 Purchased 3,500 shares of the 10,000 shares no par common shares of Ramon Co. for $45,700. The investment was accounted the equity method.
    Sept. 1 Received a cash dividend of $1 per share on the Dankin Corporation stock acquired on August 1.
    1 Received a cash dividend of $2 per share on the Ramon Co. stock acquired on August 1.
    Dec. 31 Sold 100 shares of the Dankin Corporation shares acquired on August 1 for $2,100.
    31 Dankin Corporation reported net income of $30,000 and Ramon Company’s reported net income was $50,000.

    If an amount box does not require an entry, leave it blank.

    Aug. 1
    Aug. 1
    Sept. 1
    Sept. 1
    Dec. 31
    Dec. 31

Answers

Please mark the answer as helpful for the correct and quick answer, thanks !!

1-Aug Investment in shares - Dankin Corp Dr 5100
                    Cash Cr 5100
( To record investment in shares)
1-Aug Investment in shares -Ramon Co Dr 45700
                    Cash Cr 45700
( To record investment in shares)
1-Sep Cash Dr 600
             Dividend Income Cr 600
( To record cash dividend received for Dankin Corp @ $1 per share)
1-Sep Cash Dr 7000
                 Investment n shares - Ramon Co Cr 7000
( To record cash dividend received for Ramon Co @ $2 per share)
31-Dec Cash Dr 2100
             Investment in shares - Ramon Co Cr 850
             Income on sale of shares Cr 1250
( To record sale of 100 shares of Dankin Corp , cost = 5100/600*100)
31-Dec Investment in shares - Ramon Co Dr 17500
                     Equity Income - Ramon Co Cr 17500
( To record income 35% share of income in Ramon Co 50000 * 35%)
.

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