Question

1. Present entries to record the following selected transactions of Masterson Co.

   Aug.	1	Purchased 600 shares of the 100,000 shares outstanding $10 par common shares of Dankin Corporation for $5,100.
   	1	Purchased 3,500 shares of the 10,000 shares no par common shares of Ramon Co. for $45,700. The investment was accounted the equity method.
   Sept.	1	Received a cash dividend of $1 per share on the Dankin Corporation stock acquired on August 1.
   	1	Received a cash dividend of $2 per share on the Ramon Co. stock acquired on August 1.
   Dec.	31	Sold 100 shares of the Dankin Corporation shares acquired on August 1 for $2,100.
   	31	Dankin Corporation reported net income of $30,000 and Ramon Company’s reported net income was $50,000.

   If an amount box does not require an entry, leave it blank.

   Aug. 1
   Aug. 1
   Sept. 1
   Sept. 1
   Dec. 31
   Dec. 31

Answer 1

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1-Aug	Investment in shares - Dankin Corp	Dr	5100
	Cash	Cr		5100
	( To record investment in shares)
1-Aug	Investment in shares -Ramon Co	Dr	45700
	Cash	Cr		45700
	( To record investment in shares)
1-Sep	Cash	Dr	600
	Dividend Income	Cr		600
	( To record cash dividend received for Dankin Corp @ $1 per share)
1-Sep	Cash	Dr	7000
	Investment n shares - Ramon Co	Cr		7000
	( To record cash dividend received for Ramon Co @ $2 per share)
31-Dec	Cash	Dr	2100
	Investment in shares - Ramon Co	Cr		850
	Income on sale of shares	Cr		1250
	( To record sale of 100 shares of Dankin Corp , cost = 5100/600*100)
31-Dec	Investment in shares - Ramon Co	Dr	17500
	Equity Income - Ramon Co	Cr		17500
	( To record income 35% share of income in Ramon Co 50000 * 35%)