Solution-Balances from the trial balance

Balances from the trial balance

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Reference no: EM13849512

In February 2014, ABC Inc.invested excess cash in shares of PLZ Corporation, a publicly traded company with over 1,000,000 shares outstanding. ABC Inc. bought 2,700 shares at $11.65 per share. The shares were bought on speculation that they would increase in value, as analyst valuations for the next 12 months were that the shares would trade in the $31 to $36 range. Brokerage costs were $0.05 per share plus a flat fee of $29.00. The closing price of the shares and the dividends per share are as follows for the quarter-ends:

The following are the balances from the Trial Balance of ABC Inc.

	Debit	Credit
Investment in PLZ shares (at FVPL)	84,240.00
Gain (loss) on investment in PLZ shares		52,785.00
Investment transaction costs	164.00

Required

Prepare the required adjusting entries for 2014 and complete the following table:

Date		Number of shares	Closing value on stock exchange	Dividend / share	Fair value	Dividend income	Gain or Loss through P&L
February 17, 20X4	Purchase	2,700	$11.65
March 31, 20X4			$16.20	$0.24
June 30, 20X4			$22.75	$0.25
September 30, 20X4			$31.20	$0.26
December 31, 20X4			$29.85	$0.26
						$0.00	$0.00

Reference no: EM13849512

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Balances from the trial balance

Reference no: EM13849512

Reference no: EM13849512

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