On January 1, 2018 Vulcan Company purchased 400 of the 1000 shares of Star Trek company...
On January 1, 2018 Vulcan Company purchased 400 of the 1000 shares of Star Trek company stock for $60,000. At this time, Star Trek had a truck with a book value of $40,000 and a fair market value of $80,000. The truck has a life of 5 years with no salvage value and Star Trek uses straight line depreciation.
- On July 1, 2018 Star Trek paid a dividend of $1 per share.
- On December 31, 2018 Star Trek reported a profit of $11,000 and its stock was selling $151 per share
- On July 1, 2019 Star Trek paid a dividend of $2 per share
- On December 31, Star Trek reported a loss of $5000 and its stock was selling for $148 per share
- On July 1, 2020 Star Trek announced that it wasn't paying any dividends in 2020.
- On December 31, 2020 Star Trek reported a profit of $3000 and its stock was selling for $155 per share
- On January 31, 2021 Vulcan sold its entire investment in Star Trek at $150 per share
1. Make all journal entries connected with Vulcan's Investment in Star Trek in.
2. Fill in the following table:
| 2018 | 2019 | 2020 | |
| Investment in Star Trek | |||
| Investment Income |
Homework Answers
| Journal entries | |||||
| Date | Particulars | Debit | Credit | ||
| Jan-18 | investment in star trek | $ 60,000.00 | |||
| cash | $ 60,000.00 | ||||
| (to record investment in star trek) | |||||
| Jul-18 | cash | $ 400.00 | |||
| dividend income | $ 400.00 | ||||
| (to record dividend received) | |||||
| Jul-18 | Dividend income | $ 400.00 | |||
| profit/loss | $ 400.00 | ||||
| (to record transfer of dividend) | |||||
| Dec-18 | Investment in star strek | $ 4,400.00 | |||
| share of profir from trek profit/loss | $ 4,400.00 | ||||
| (to record income ) | |||||
| 2019 | |||||
| Jul-19 | cash | $ 800.00 | |||
| Dividend income | $ 800.00 | ||||
| (to record dividend trf to profit/loss) | |||||
| Jul-19 | dividend | $ 800.00 | |||
| profit/loss | $ 800.00 | ||||
| (to record dividend trf to profit/loss) | |||||
| Dec-19 | share of loss from star trek profit/loss | $ 2,000.00 | |||
| investment in star trek | $ 2,000.00 | ||||
| (to record loss booked) | |||||
| 2020 | Investment in star trek | $ 1,200.00 | |||
| share of profit from star treck | $ 1,200.00 | ||||
| (to record income booked) | |||||
| 2021 | |||||
| Jan-21 | Cash | $ 62,000.00 | |||
| loss on investment in star trek | $ 1,600.00 | ||||
| investment in star trek | $ 63,600.00 | ||||
| (to record stock sold & loss) | |||||
| Table | |||||
| Particulars | 2018 | 2019 | 2020 | ||
| investment in star treck | $ 64,400.00 | $ 62,400.00 | $ 63,600.00 | ||
| Investment income | $ 400.00 | $ 800.00 | $ - | ||
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