Answer :
Answer:
Dr Investment in shares $375,125
Cr Cash $375,125
Dr cash $7,500
Cr Investment income $7,500
Dr Cash $176,580
Cr investment in shares $142,547.50
Cr gain on investment $ 34,032.50
Explanation:
On the date of purchase the total cash paid is computed thus:
(15,000*$25)+$125=$375,125 which is debited investment account and credited to cash.
The dividends received =15,000*$0.50=$7,500 which debited to cash and credit to investment income.
Sale of 5700 brings in cash $ 176,580.00 ($31*5700)-$120 which is debited to cash and whose cost of $ 142,547.50 (5700*15000*$375,125) would be credited to investment account while the difference of $ 34,032.50
($176580-$142,547.50) is credited to gain on investment.
Answer:
Jan 23
Dr Investment company T $375,145
Cr Cash $375,145
April 12
Dr Cash $7,500
Cr Dividend Revenue $7,5000
June 10
Dr Cash $176,580
Cr investment in shares $142,547.50
Cr gain on investment $34,032.50
Explanation:
Jan 23
Dr Investment company T $375,145
(15,000 shares ×$25)+$145
Cr Cash $375,145
April 12
Dr Cash $7,500
Cr Dividend Revenue $7,5000
($15,000× $0.50-per-share dividend)
June 10
Dr Cash $176,580
($5,700×$31) -$120
Cr investment in shares $142,547.50
Cr gain on investment $34,032.50