Ask Question
12 May, 03:15

Use the financial statement effects template to record the following four transactions involving investments in marketable securities. Assume that all these transactions occur in 2018.

1. Purchased 12,000 common shares of Liu, Inc., at $12 cash per share.

2. Received a cash dividend of $1.10 per common share from Liu.

3. Year-end market price of Liu common stock is $11.25 per share.

4. Sold all 12,000 common shares of Liu for $133,800.

Use negative signs with your answers, when appropriate.

+1
Answers (1)
  1. 12 May, 07:05
    0
    Answer and Explanation:

    The presentation of the financial statement effects template is shown below:

    Balance Sheet

    Transaction Cash Asset + Non - cash Assets = Liabilities + Contributed Capital + Earned Capital

    1 - $144,000 $144,000 $0.00 $0.00 $0.00

    2 $13,200 $0.00 $0.00 $0.00 $13,200

    3 $0.00 - $9,000 $0.00 $0.00 - $9,000

    4 $133,800 - $135,000 $0.00 $0.00 - $1,200.00

    Income Statement

    Transaction Revenue - Expenses = Net Income

    1 $0.00 $0.00 $0.00

    2 $13,200 $0.00 $13,200

    3 $0.00 - $9,000.00 - $9,000

    4 $0.00 $1,200.00 - $1,200.00

    Working note

    1. 12,000 shares * $12 = $144,000

    2. 12,000 shares * $1.10 = 13,200 shares

    3. ($12 - $11.25) * 12,000 shares = $9,000

    The amount of items displayed in the financial statement affect that account and in which the amount is zero does not affect overall.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Use the financial statement effects template to record the following four transactions involving investments in marketable securities. ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers