Question

Exercise 12-4 Hulse Company had the following transactions pertaining to stock investments. Feb. 1 July 1 Sept. 1 Dec. 1 Purchased 540 shares of Wade common stock (2%) for $6,480 cash. Received cash dividends of $2 per share on Wade common stock. Sold 210 shares of Wade common stock for $3,230. Received cash dividends of $2 per share on Wade common stock. Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS LINK TO TEXT VIDEO: APPLIED SKILLS How would the dividend revenue and the gain (loss) on sale be reported in the income statement? Dividend revenue and the gain on sale of stock investments are reported under in the income statement.

Answer 1

Answer:1)

Date	account and explanation	debit($)	credit($)
Feb-01	Stock investment	6,480
	Cash		6,480
	(To record purchase of 540 shares )
Jul-01	Cash (540*2)	1,080
	Dividend revenue		1,080
	(To record dividend received)
Sep-01	Cash	3,230
	Gain on sale of stock investment		710
	Stock investment (6480/540*210)		2,520
	(To record sale of 210 shares)
Dec-01	Cash (540-210)*2	660
	Dividend revenue		660
	(To record dividend received)

2.The Income Statement:
Dividend Revenue(1080+660)	$1740
Realized Gain on Sale of Stock Investment	$710
Total revenue	$2450