Question

Sep. 30 Received a $16,800 divi for $447,000 end < Prev 9of 10 Next >

Answer 1

Ans-1- Journal Entries

Date	Account Title and Explanation	Debit ($)	Credit ($)
Mar.31	Investment in DT Corporation A/c Dr.	420,000
	Cash A/c		42,0000
	(To record investment in Distribution Transformers Corporation )
Sep. 01	Investment in American Instruments A/c Dr.	930,000
	Cash A/c		930,000
	(To record the investment in American Instruments)
Sep 30	Cash A/c Dr.	16,800
	Dividend Revenue		16,800
	(To record the dividend received)
Oct. 02	Fair Value Adjustment A/c Dr.	27,000
	Unrealized Holding Gain- NI		27,000
	(To record the gain on DT Common Stock)
Oct.02	Cash A/c Dr.	447,000
	Investment in Distribution Transformers Stock		420,000
	Fair Value Adjustment A/c		27,000
	(To record the sell of Distribution Transformers Stock)
Nov.01	Investment in M&D Corporation Stock A/c Dr.	1,420,000
	Cash A/c		1,420,000
	(To record the investment in M& D Corporation )
Dec. 31	Fair Value Adjustment A/c Dr.	10,000
	Net Unrealized Holding Gain and Loss		10,000
	(To record adjustment of unrealized gain)

Working Note:- Calculating Net Unrealized Holding Gain or Loss:-

Particulars	Face Value ($)	Market Value ($)	Unrealized Holding Gain/ Loss ($)
American Instruments Common Stock	930,000	878,000	(52,000)
M&D Common Stock	1,420,000	1,482,000	62,000
Net Unrealized Holding Gain	$2,350,000	$2,360,000	$10,000

Ornamental Insulation

Income Statement

For the Year Ended 2018

Particulars	Amount ($)
Other Revenues and Gains:-
Dividend Revenue	16,800
Unrealized Holding Gain-NI	27,000
Net Income	43,800

Ornamental Insulation Corporation

Statement of Comprehensive Income

For the Year Ended 2018

Net Unrealized Holding Gain

$10,000

Ornamental Insulation Corporation

Balance Sheet

As at 2018

Assets
Current Assets:-
Securities available for sale	$2,350,000
Add: Fair value adjustments	$10,000	$2,360,000
Shareholders' Equity
Net Unrealized holding gain		$10,000