Saturday, 3 January 2015

On February 1, Minitori Company purchased 200 shares (2% ownership) of Becker Company common stock for $30 per share plus brokerage fees of $420. On March 20, Minitori Company sold 40 shares of Becker stock for $1,160, less a $31 brokerage fee. Minitori received a dividend of $2 per share on April 25. On June 15, Minitori sold 80 shares of Becker stock for $2,960, less a $51 brokerage fee. On July 28, Minitori received a dividend of $3 per share. Prepare the journal entries to record the transactions described above.

On February 1, Minitori Company purchased 200 shares (2% ownership) of Becker Company common stock for $30 per share plus brokerage fees of $420. On March 20, Minitori Company sold 40 shares of Becker stock for $1,160, less a $31 brokerage fee. Minitori received a dividend of $2 per share on April 25. On June 15, Minitori sold 80 shares of Becker stock for $2,960, less a $51 brokerage fee. On July 28, Minitori received a dividend of $3 per share.

Prepare the journal entries to record the transactions described above.

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Explanation
February 1
Cash = [(200 x $30) + $420] = $6,420
 





March 20
Cash = ($1,160 – $31) = $1,129


Stock Investments = ($6,420 x 40/200) = $1,284
 





April 25
Cash = (160 x $2) = $320
 





June 15
Cash = ($2,960 – $51) = $2,909


Stock Investments = ($6,420 x 80/200) = $2,568
 





July 28
Cash = (80 x $3) = $240

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