Balances from the trial balance

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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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