Prepare the september journal entry settling option for cash

Assignment Help Financial Accounting
Reference no: EM132762202

On August 1, 2020, Shamrock Ltd. purchased a call option from Starco Corporation. The option gave Shamrock the right to buy 7,800 shares in a third company, Dillon Ltd., at a price of $11 per share. On the day Shamrock purchased the option, Dillon shares were trading at $11 each. Shamrock paid $1,700 for the options. On August 31, 2020, the Dillon shares were trading at $13 each, and the options for Dillon shares were trading at $23,700. On September 15, Shamrock settled the options in cash when the Dillon shares were trading at $15 and the options were trading at $31,200.

Problem 1: the journal entries to record the above transactions

Problem 2: the September 15 journal entry settling the option for cash, and assuming Shamrock accepted instead the shares in Dillon. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Reference no: EM132762202

Questions Cloud

How you will go about securing the support : Stakeholder support is necessary for a successful project implementation. Consider your internal stakeholders, such as the facility, unit, or health care.
What will be velocity : An object with a mass of 15 kg rests on a horizontal plane and is acted upon by a horizontal force of 100 N [East] and a frictional force of 70N.
Identify and discuss any related mitigating factors : List the factors that indicate that Speed may have a going concern problem. For each factor, identify and discuss any related mitigating factors
Do you plan to use the technology : Technology is integral to successful implementation in many projects, through either support or integration or both. Name at least one technology that could.
Prepare the september journal entry settling option for cash : Prepare the September 15 journal entry settling the option for cash, and assuming Shamrock accepted instead the shares in Dillon.
Describe your current knowledge of the facility : Describe your current knowledge of the facility you chose for your practicum experience and your reasoning for choosing this particular facility.
What minimum runway length is required : If the plane can accelerate at a constant rate of 4 m/s2, what minimum runway length is required for the airplane to take off safely
What are the consequences : The company is having a very good year. If Grace Company was using the FIFO method of inventory costing, what are the consequences
Explain in presentation how new communication systems : Explain in your presentation how the new communication systems recommendations provided will help improve efficiency in his virtual teams

Reviews

Write a Review

Financial Accounting Questions & Answers

  Determine what logical arguments might use to convince boss

What logical arguments might you use to convince your boss to forego the project despite its high rate of return? Is it possible that making investments

  Concept of accounting for merchandise through short

concept of accounting for merchandise through short questions and journal entries.1.nbspon june 1 20x1 jordan company

  How do prepare the transaction for august

How do Prepare the transaction for august. Sept 15 gave a partial payment of 10,000 for the equipment bought last aug 23 and gave a note for the balance

  Determine what is future value of the investment cash flows

Gary King, If his investments typically earn 6.15 percent, what is the future value of the investment's cash flows at the end of five years?

  Compute the present value of each of the cash flows

Compute the present value of each of the cash flows using a discount rate of 13 per cent. Rs 6,000 cash inflow one year from now.

  Net present value of this investment project

Alopecia Hair Tonic Corporation is considering an investment project that is expected to generate net cash inflows of $65,000 per year for 4 years. The only initial investment funds required will be a $150,000 increase in working capital. The net pre..

  Calculate the? firm tax liability

Calculate the? firm's tax liability if it sold the machine for each of the following? amounts: $98,400?; $57,400?; $23,780?; and $16,600.

  What are the break-even points in sales dollars

A multiproduct company had sales of $40,000 and variable costs of $10,000 for product A and sales of $80,000 and variable costs of $50,000 for product B. If fixed costs were $240,000, what are the break-even points in sales dollars for A and B, respe..

  How much is the depreciation expense for the year ended dec

Assuming that Simon uses straight -line method of depreciation, how much is the depreciation expense for the year ended December 31, 2017?

  Solve the current problem of unutilised capacity

Solve the current problem of unutilised capacity at the Welgevonden safari lodges. The demand from Interstate is equivalent to 60 normal all inclusive six-night packages sold by EA SA.

  What is p and g accounting policy related to advertising

What is P&G's accounting policy related to advertising? What accounting principle does P&G follow regarding accounting for advertising? Where are advertising expenses reported in the financial statements?

  List five format differences in the companies balance sheet

Assess whether the scope and content of the information provided in the notes to the financial statements is similar between the two companies.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd