
Assessing Financial Statement Effects of Trading and Available-for-Sale Securities
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.
- Purchased 12,000 common shares of Liu, Inc., at $12 cash per share.
- Received a cash dividend of $1.10 per common share from Liu.
- Year-end market price of Liu common stock is $11.25 per share.
- Sold all 12,000 common shares of Liu for $133,800.
Use negative signs with your answers, when appropriate.
Balance Sheet | ||||||||||
Transaction | Cash Asset | + | Noncash
Assets |
= | Liabilities | + | Contributed
Capital |
+ | Earned
Capital |
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(1) | Answer -144000
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Answer 144000
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Answer 0
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Answer 0
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Answer 0
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(2) | Answer 13200
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Answer 0
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Answer 0
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Answer 0
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Answer 13200
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(3) | Answer 0
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Answer -9000
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Answer 0
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Answer 0
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Answer -9000
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(4) | Answer 133800
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Answer -135800
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Answer 0
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Answer 0
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Answer -1200
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Income Statement | |||||
Revenue |
– |
Expenses |
= |
Net
Income |
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Answer 0
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Answer 0
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Answer 0
|
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Answer 13200
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Answer 0
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Answer 13200
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Answer 0
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Answer 9000
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Answer -9000
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Answer 0
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Answer 1200
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Answer -1200
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