Question

Top Team Investments completed the follawing investment transactions during 2018: i (Click the icon to view the transactions.) Requirements Joumalize the entries for 2018. Explanations are not required What account(s) and amount(s), if any, would be reported on Top Team's income statement for the year ended December 31, 2018? 1. Requirement 1. Joumalize the entries for 2018. Explanations are not required. (Record debits first, then credits. Exclude explanations from journal entries. If no entry is required, select "No entry required" on the first line of the Accounts column and leave the remaining cells blank.) Jan. 14: Purchased 1,200 shares of Robotic stock, paying $41 per share. The investment represents 2 % ownership in Robotic's voting stock. Top Team does not have significant influence over Robolic. Top Team intends to hold the investment for the indefinite future. Date Accounts Debit Credit Jan. 14 More Info Jan. 14 Purchased 1,200 shares of Robotic stock, paying S41 per share. The investment represents 2% ownership in Robotic's voting stock. Top Team does not have significant influence over Robotic. Top Team intends to hold the investment for the indefinite future Aug. 22 Received a cash dividend of $0.73 per share on the Robotic stock. Dec. 31 Adjusted the Robotic investment to its current market value of $44 Print Done

Answer 1

1) Journal Entries

Jan 14

Debit - Investment Account - $49,200

Credit - Cash / Bank Account - 449,200

(Investment made in Robotic 1200 shares at $41)

August 22nd

Debit - Cash / Bank Account - $876

Credit - Dividend Received - $876

(Cash Dividend received from Robotic 1200 shares at 0.73)

Dec 31st

Debit - Investments Account - $3,600

Credit - Unrealized Gain - $3,600

(Fair Market value is $44 which is higher than book value of $41. Difference of $3 is considered as unrealized gain as it will be realized when it sold)

2) Unrealized Gain and Cash dividend received is reported in Top team investments income statement.