Problem 12-2A In January 2017, the management of Kinzie Company concludes that i
ID: 2561413 • Letter: P
Question
Problem 12-2A In January 2017, the management of Kinzie Company concludes that it has sufficient cash to permit some short-term investments in debt and stock securities. During the year, the following transactions occurred. Feb. 1 Purchased 400 shares of Muninger common stock for $20,000 Mar. 1 Purchased 600 shares of Tatman common stock for $13,800. Apr. 1 Purchased 30 $1,000, 5% Yoakem bonds for $30,000. Interest is payable semiannually on April 1 and October 1. July 1 Received a cash dividend of $o.50 per share on the Muninger common stock Aug. 1 Sold 133 shares of Muninger common stock at $60 per share. Sept. 1 Received a $1 per share cash dividend on the Tatman common stock. Oct. 1 Oct. 1 Received the semiannual interest on the Yoakem bonds Sold the Yoakem bonds for $29,000. At December 31, the fair value of the Muninger common stock was $51 per share. The fair value of the Tatman common stock was $22 per share.Explanation / Answer
For Ledger posting - I advise you to simply read my journal entries and post it in the correct ledger.
For eg , the 1st entry is
To Cash
So in
Stock Investment A/C you need to simply write TO CASH on the Debit side.
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Date Account title Debit Credit 1-Feb Stock Investment A/C Dr (20000/400 =$50 per sh) 20000 To Cash 20000 1-Mar Stock Investment A/C Dr (13800/600 = $23 per sh) 13800 To Cash 13800 1-Apr Debt Investment Dr 30000 To Cash 30000 1-Jul Cash Ac Dr (0.5 X 400) 200 To Dividend 200 1-Aug Cash AC Dr (133 X 60) 7980 To Profit on sale (133 X 10) 1330 To Stock Investment A/C (133X 50) 6650 1-Sep Cash Ac Dr (1 X 600) 600 To Dividend 600 1-Oct Cash AC Dr ( 30000 X 5% / 2) 750 To Interest on bond AC 750 1-Oct Cash AC Dr 29000 Loss on sale Dr 1000 To Debt Investment 30000 31-Dec Stock Investment Dr (267 X 1 - Muninger) 267 Interest on bond Dr 750 Dividend Dr 600 Profit on sale Dr 1330 To Income statement 2947 31-Dec Income statement Dr 1600 To Stock Investment ( 600X 1 - Tatman) 600 To Loss on sale 1000