Ellis Transport Company acquired 1.1 million shares of stock in L&K Corporation at $55 per share....
Ellis Transport Company acquired 1.1 million shares of stock in
L&K Corporation at $55 per share. They are classified by Ellis
as “available for sale.” Ellis sold 100,000 shares at $59, received
a 10% stock dividend, and then later in the year sold another
100,000 shares at $54.
Hint: There is no entry for the stock dividend, but a new
investment per share must be calculated for use later when the
shares are sold.
Required:
Prepare journal entries to record these transactions:
1) Record acquisition of shares in L & K Corporation.
2) Record sale of 100,000 shares.
3) Record sale of 100,000 shares.
Homework Answers
Value of Investment after 1st Sale = 60,500,000 - 5,500,000 = 55,000,000
Value of Investment after 2nd Sale = 55,000,000 - 5,500,000 = 49,500,000
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Ellis Transport Company acquired 1.1 million shares of stock in
L&K Corporation at $55 per share....
Ellis Transport Company acquired 1.1 million shares of stock in L&K Corporation at $55 per share....
Ellis Transport Company acquired 1.1 million shares of stock in L&K Corporation at $55 per share. They are classified by Ellis as “available for sale.” Ellis sold 100,000 shares at $59, received a 10% stock dividend, and then later in the year sold another 100,000 shares at $54. Hint: There is no entry for the stock dividend, but a new investment per share must be calculated for use later when the shares are sold. Required: Prepare journal entries to record...
Ellis Transport Company acquired 1.6 million shares of stock in L&K Corporation at $88 per share....
Ellis Transport Company acquired 1.6 million shares of stock in L&K Corporation at $88 per share. They are classified by Ellis as "available for sale." Ellis sold 600,000 shares at $90, received a 10% stock dividend, and then later in the year sold another 100,000 shares at $87. Hint There is no entry for the stock dividend, but a new investment per share must be calculated for use later when the shares are sold. Required: Prepare journal entries to record...
Ellis Transport Company acquired 1.8 million shares of stock in L&K Corporation at $44 per share....
Ellis Transport Company acquired 1.8 million shares of stock in L&K Corporation at $44 per share. They are classified by Ellis as "available for sale. Ellis sold 800,000 shares at $46, received a 10% stock dividend, and then later in the year sold another 200,000 shares at $43 Hint There is no entry for the stock dividend, but a new investment per share must be calculated for use later when the shares are sold. Required: Prepare journal entries to record...
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Ellis Transport Company acquired 1.6 million shares of stock in L&K Corporation at $88 per share. They are classified by Ellis as "available for sale." Ellis sold 600,000 shares at $90, received a 10% stock dividend, and then later in the year sold another 100,000 shares at $87. Hint There is no entry for the stock dividend, but a new investment per share must be calculated for use later when the shares are sold. Required: Prepare journal entries to record...
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