Entries for Investment in Stock Receipt of Dividends and Sal

Entries for Investment in Stock, Receipt of Dividends, and Sale of Shares The following equity investment transactions were completed by Romero Company during a recent year: Apr. 10. Purchased 3,400 shares of Dixon Company for a price of $61.5 per share plus a brokerage commission of $1,700. July 8. Received a quarterly dividend of $0.2 per share on the Dixon Company investment. Sept. 10. Sold 2,300 shares for a price of $55 per share less a brokerage commission of $950. Journalize the entries for these transactions. If required, round the final answers to the nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank. Apr. 10 - Purchase Investments-Dixon Company Stock Cash July 8 - Dividend Cash Dividend Revenue Sept. 10 - Sale Cash Loss on Sale of Investments Investments-Dixon Company Stock

Solution

Purchase of Investment

Date

General Journal

Debit

Credit

10-Apr

Investments-Dixon Company Stock

$ 210,800.00

          Cash

$ 210,800.00

(Investment purchase 3400 shares for 209100+1700 )

Receipt of Dividend

8-Jul

Cash

$          680.00

    Dividend Income

$          680.00

(Dividend Received on shares )

Sale of Investment

10-Sep

Cash

$ 125,550.00

     Loss on sale of Investment

$    17,050.00

     Investments-Dixon Company Stock

$ 142,600.00

(Sale of Investment)

Working note 1

Cost per Share

Purchase cost of Shares

$ 209,100.00

Add: Brokerage

$       1,700.00

Net Purchase Cost

$ 210,800.00

Number of Shares Purchased

3400

Cost per Share

$             62.00

Working note 2

Sale price per Share

Sale of share

$ 126,500.00

Less: Brokerage

$          950.00

Net Proceeds from Sale

$ 125,550.00

Number of shares Sold

2300

Sale price per Share

$             54.59

Working note 3

Calculation of value of Shares Sold

Number of Shares sold*Cost per share

(2300*62)

$                                                                                    142,600.00

Working note 4

Shares Purchased

3400

Shares Sold

2300

Shares left in Investment

1100

Purchase of Investment
Date	General Journal	Debit	Credit
10-Apr	Investments-Dixon Company Stock	$ 210,800.00
	Cash		$ 210,800.00
	(Investment purchase 3400 shares for 209100+1700 )
Receipt of Dividend
8-Jul	Cash	$          680.00
	Dividend Income		$          680.00
	(Dividend Received on shares )
Sale of Investment
10-Sep	Cash	$ 125,550.00
	Loss on sale of Investment	$    17,050.00
	Investments-Dixon Company Stock		$ 142,600.00
	(Sale of Investment)