Question

During the fourth quarter of 2020, Dorsey Enterprises Corp. decided to invest excess cash in the...

During the fourth quarter of 2020, Dorsey Enterprises Corp. decided to invest excess cash in the equity securities of “blue chip” companies. Dorsey Enterprises Corp. engaged in the following transactions relating to its investments and obtained information about its investment holdings as detailed below.

Prepare the entries in general journal form to record the investment transactions of Dorsey Enterprises Corp. and properly report the investments in the GAAP financial statements for 2020 as well as additional transactions in 2021. Present any supporting calculations in the spaces provided.

Be sure to provide an explanation of the effect of any transaction that did not require a formal journal entry.       (4 points each except when otherwise noted)

  1. On October 15, 2020, the company purchased 5,000 common shares of The Coca-Cola Company at $58.25 per share and incurred a broker’s fee of $350 on the purchase.

DATE

ACCOUNT NAMES

DEBIT

CREDIT

Supporting Calculations Required:

  1. On October 22, 2020, the company purchased 10,000 common shares of Microsoft Corporation at $28.20 per share and incurred a broker’s fee of $500 on the purchase.

DATE

ACCOUNT NAMES

DEBIT

CREDIT

Supporting Calculations Required:

  1. On October 29, 2020, the company sold the 10,000 common shares of Microsoft Corporation when its price dropped to $26.75 per share and incurred $500 broker’s commission on the sale.

DATE

ACCOUNT NAMES

DEBIT

CREDIT

Supporting Calculations Required:

  1. On November 12, 2020, the board of directors of The Coca-Cola Company announced and distributed a 2-1 common stock split. Coca-Cola’s stock was selling at $62 and $31 per share immediately before and after the split.

DATE

ACCOUNT NAMES

DEBIT

CREDIT

  1. On December 1, 2020, the board of directors of The Coca-Cola Company declared a $0.28 per share cash dividend payable to its common shareholders on January 9, 2021.

DATE

ACCOUNT NAMES

DEBIT

CREDIT

Supporting Calculations Required:


  1. On December 31, 2020, the company determined that the closing prices of its holdings of common stock were: The Coca-Cola Company $34.50 per share.

DATE

ACCOUNT NAMES

DEBIT

CREDIT

Supporting Calculations Required:

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Answer:

Dorsey Enterprises Corp

General Journal of Equity Investment

Credit ($) Date General Journal Oct.15, 2020 Equity investment - Coca Cola Company (5,000 $58.25) + $350 Cash Debit ($) 291,6

Add a comment
Know the answer?
Add Answer to:
During the fourth quarter of 2020, Dorsey Enterprises Corp. decided to invest excess cash in the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • a) On December 23, Dizzy Controls Inc. received $28,500 cash from Lawrence Enterprises as a partial...

    a) On December 23, Dizzy Controls Inc. received $28,500 cash from Lawrence Enterprises as a partial payment on its account from December 9. DEBIT ACCOUNT NAMES DATE CREDIT r) On December 29, Dizzy Controls Inc. received a bill in the amount of $3,750 from Inter-Ad for internet advertising used during December. DEBIT CREDIT DATE ACCOUNT NAMES s) On December 30, Dizzy Controls Inc. received a check for $62,700 from Luca Mfg. Company of which $25,900 was for services provided in...

  • Monty Corp. was organized on January 1, 2020. It is authorized to issue 12,000 shares of...

    Monty Corp. was organized on January 1, 2020. It is authorized to issue 12,000 shares of 8%, $100 par value preferred stock, and 513,000 shares of no par common stock with a stated value of $3 per share. The following stock transactions were completed during the first year: Jan. 10 Issued 77,000 shares of common stock for cash at $6 per share. Mar. 1 Issued 4,300 shares of preferred stock for cash at $105 per share. Apr. 1 Issued 25,000...

  • Cheyenne Corp. had the following stockholders' equity accounts on January 1, 2020: Common Stock ($4 par) $426,360...

    Cheyenne Corp. had the following stockholders' equity accounts on January 1, 2020: Common Stock ($4 par) $426,360, Paid-in Capital in Excess of Par- Common Stock $178,770, and Retained Earnings $118,890. In 2020, the company had the following treasury stock transactions Mar. 1 Purchased 6,950 shares at $9 per share. June 1 Sold 1,160 shares at $13 per share. Sept. 1 Sold 1,930 shares at $11 per share. Dec. 1 Sold 1,170 shares at $6 per share. Cheyenne Corp. uses the...

  • On September 15, 2020, the Board of Directors of Tamarisk Company declared a 90¢ per share...

    On September 15, 2020, the Board of Directors of Tamarisk Company declared a 90¢ per share cash dividend, payable on October 31 to shareholders of record as of October 1. On the date of declaration, Tamarisk Company had 205,000 common shares outstanding, of which 27,000 were held in Treasury. On October 15, 2020, the company issued an additional 60,000 common shares for $6.00 each. Prepare all the required journal entries to record these transactions. (Credit account titles are automatically indented...

  • Pearl Company has the following portfolio of investment securities at September 30, 2020, its most recent...

    Pearl Company has the following portfolio of investment securities at September 30, 2020, its most recent reporting date. Investment Securities Cost Fair Value Horton, Inc. common (4,800 shares) $206,400 $190,060 Monty, Inc. preferred (3,430 shares) 126,910 133,740 Oakwood Corp. common (1,020 shares) 179,520 178,470 On October 10, 2020, the Horton shares were sold at a price of $54 per share. In addition, 3,090 shares of Patriot common stock were acquired at $56 per share on November 2, 2020. The December...

  • Indigo Company has the following portfolio of investment securities at September 30, 2020, its most recent...

    Indigo Company has the following portfolio of investment securities at September 30, 2020, its most recent reporting date. Investment Securities Horton, Inc. common (4,870 shares) Monty, Inc. preferred (3,220 shares) Oakwood Corp. common (990 shares) Cost $204,540 125,580 176,220 Fair Value $188,780 133,000 175,320 On October 10, 2020, the Horton shares were sold at a price of $53 per share. In addition, 3,170 shares of Patriot common stock were acquired at $54 per share on November 2, 2020. The December...

  • Vaughn Manufacturing is authorized to issue 2,960,000 shares of $1 par value common stock. During 2020,...

    Vaughn Manufacturing is authorized to issue 2,960,000 shares of $1 par value common stock. During 2020, the company has the following stock transactions. Jan. 15 Issued 819,000 shares of stock at $7 per share. Sept. 5 Purchased 28,000 shares of common stock for the treasury at $9 per share. Dec. 6 Declared a $0.50 per share dividend to stockholders of record on December 20, payable January 3, 2021. Journalize the transactions for Vaughn Manufacturing. (Credit account titles are automatically indented...

  • Skysong Company has the following portfolio of investment securities at September 30, 2020, its most recent...

    Skysong Company has the following portfolio of investment securities at September 30, 2020, its most recent reporting date. Investment Securities Horton, Inc. common (4,670 shares) Monty, Inc. preferred (3,740 shares) Oakwood Corp. common (950 shares) Cost Fair Value $205,480 $190,250 145,860 153,180 161,500 160,470 On October 10, 2020, the Horton shares were sold at a price of $56 per share. In addition, 3,290 shares of Patriot common stock were acquired at $58 per share on November 2, 2020. The December...

  • Skysong Company has the following portfolio of investment securities at September 30, 2020, its most recent reporting d...

    Skysong Company has the following portfolio of investment securities at September 30, 2020, its most recent reporting date. Investment Securities Horton, Inc. common (4,670 shares) Monty, Inc. preferred (3,740 shares) Oakwood Corp. common (950 shares) Cost Fair Value $205,480 $190,250 145,860 153,180 161,500 160,470 On October 10, 2020, the Horton shares were sold at a price of $56 per share. In addition, 3,290 shares of Patriot common stock were acquired at $58 per share on November 2, 2020. The December...

  • Dominica Corporation is authorized to issue 1,000,000 shares of $1 par value common stock. During 2020,...

    Dominica Corporation is authorized to issue 1,000,000 shares of $1 par value common stock. During 2020, the company has the following stock transactions. Jan. 15 Issued 400,000 shares of stock at $7 per share. Sept. 5 Purchased 30,000 shares of common stock for the treasury at $9 per share. Journalize the transactions for Dominica Corporation. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT