For Sheet 1 - Black, Inc. management occasionally invests idle cash in stocks that are not intended to be held long term. Management treats these investments as trading securities.
1/5/15Purchased 2,500 shares of Eversilver Corporation common stock, which constitutes less than 10% of the outstanding shares of the company for $54.00 per share cash plus a total broker commission of $200.6/15/15Received a cash dividend of $1.50 per share.12/15/15Received a cash dividend of $1.60 per share.12/31/15The market value of the stock is $60 per share as of year end, and a commission of $200 would apply to sell the shares.1/22/16Sold 1,000 shares of Eversilver Corporation common stock for $62 per share minus $120 commission.Instructions: Prepare journal entries for the above transactions.
For Sheet 2 - White Corporation acquired 50,000 shares of the outstanding common stock of Gold Company for $12.00 per share. The following events occurred during the year.
6/15/15Gold declared and paid $0.50 per share cash dividend.12/10/15Gold declared and paid $0.55 per share cash dividend.12/31/15Gold reported net income for the year of $325,000. The market price of Gold common stock was $25 per share on the last day of the year.Instructions:
1. Prepare the journal entries for White in 2015, assuming that the purchase of Gold stock constituted less than 10% of Gold's outstanding shares. White treats this investment as available-for-sale securities.
2. Prepare the journal entries for White in 2015, assuming that the purchase of Gold stock constituted 30% of Gold's outstanding shares.
Attachment:- Assignment.rar