Question

Journal the entries to record the stock investments for Perry Company.

Feb 3 Purchased for cash 900 shares of Dexter Company stock for $54 per share. This represents an ownership interest of less than 10% in dexter.

April 15 Received dividends of .25 cents per share on on Dexter Co. STock

June 16 Sold 200 shares of Dexter Co stock for $70 per share

Aug 18 Purchased 600 shares of Dexter co stock for $65 a share

Nov 14 Received dividends of 30 cents per share on Dexter Co stock

Answer 1

Date	General Journal	Debit	Credit
03-Feb	Investment in Dexter company	$ 48,600.00
	Cash		$ 48,600.00
	(To record investment at cost)
15-Apr	Cash	$        225.00
	Dividend revenue		$        225.00
	(To record receipt of dividend on investment)
16-Jun	Cash	$ 14,000.00
	Gain on sale of Investment		$    3,200.00
	Investment in Dexter company		$ 10,800.00
	(To record sale of Investment)
18-Aug	Investment in Dexter company	$ 39,000.00
	Cash		$ 39,000.00
	(To record investment at cost)
14-Nov	Cash	$        390.00*
	Dividend revenue		$        390.00
	(To record receipt of dividend on investment)

*Dividend on 1300 shares --------(900+600-200 = 1300 shares outstanding)

Equity method of recording investment will not be used since there is less than 10% control.