stock 00120 Cash Next SolutionAll the entries given above a

Solution

All the entries given above are correct except for the sale of investments which is incorrect.

Cost of investments sold (4000 shares)

=$600120*4000shares/12000shares=$200040

Sale Price of Investments=(4000×$62)-100commission=$247900

Gain on sale of Investments=$247900-$200040=$47860

Therefore journal entry on sale of investments

Cash A/c Dr. 247900

To Investments Edward Co. stock. $200040

To Gain on sale of Investments. $47860

(Being investments sold)

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