Journalize
2013
Dec 17 Purchased 100,000 Grocer’s Supply Corporation preferred shares for $350,000.
28 Received cash dividends of $2000 from Grocer’s Supply Corporation preferred shares.
31 Recorded any necessary adjusting entry relating to the Grocers’ Supply Corporation preferred shares. The market price of the stock was $4 per share.
2014
Jan 5 Sold the Grocer’s Supply Corporation preferred shares for $395,000.
- Dec 17
- Inv in Grocers Corp pref shares 350000
- cash 350000
- Dec 28
- cash............2000
- investment revenue.....2000
- Dec 31
- fair value adjust.........50000
- net unrealized gain/loss ......50000
- 2014
- Jan 5
- Cash.....................395000
- gain on investment.............45000
- inv in grocers....................350000
- ***
- Statement of cash flows:
- 350000 inflow purch price
- 2000 dividend
- (operating)
- ***
- Balance Sheet 2013 year end
- inc fair value changes in security 400000
- ***
- Income statement 2013
- inv rev 2000
- net unrealized gain 50000
- unrealized gain/loss are relevant in the income statement.