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 |
|
| (1) | Answer -144000
|
Answer 144000
|
Answer 0
|
Answer 0
|
Answer 0
|
|||||
| (2) | Answer 13200
|
Answer 0
|
Answer 0
|
Answer 0
|
Answer 13200
|
|||||
| (3) | Answer 0
|
Answer -9000
|
Answer 0
|
Answer 0
|
Answer -9000
|
|||||
| (4) | Answer 133800
|
Answer -135800
|
Answer 0
|
Answer 0
|
Answer -1200
|
|||||
| Income Statement | |||||
|
Revenue |
– |
Expenses |
= |
Net
Income |
|
| Answer 0
|
Answer 0
|
Answer 0
|
|||
| Answer 13200
|
Answer 0
|
Answer 13200
|
|||
| Answer 0
|
Answer 9000
|
Answer -9000
|
|||
| Answer 0
|
Answer 1200
|
Answer -1200
|
|||