EX 15-8 Entries for stock investments, dividends, and sale of stock

Murray Corp. manufactures surveying equipment. Journalize the entries to record the following selected equity investment transactions completed by Murray during 2014: Jan. 16. Purchased for cash 3,000 shares of McDowell Inc. stock for $25 per share plus a $140 brokerage commission.

Mar. 23. Received dividends of $0.46 per share on McDowell Inc. stock.

May 25. Purchased 1,000 shares of McDowell Inc. stock for $35 per share plus a $160 brokerage commission.

July 10. Sold 3,200 shares of McDowell Inc. stock for $40 per share less a $200 brokerage commission. Murray assumes that the first investments purchased are the first investments sold.

Oct. 12. Received dividends of $0.51 per share on McDowell Inc. stock.


Answer:

Jan. 16 Investments—McDowell Inc. Stock* 75,140
Cash 75,140
* (3,000 shares × $25) + $140
Mar. 23 Cash* 1,380
Dividend Revenue 1,380
* 3,000 shares × $0.46
May 25 Investments—McDowell Inc. Stock* 35,160
Cash 35,160
* (1,000 shares × $35) + $160
July 10 Cash* 127,800
Gain on Sale of Investments 45,628
Investments—McDowell Inc. Stock** 82,172
* (3,200 shares × $40) – $200
** 3,000 shares purchased………………………………$75,140
200 shares × ($35,160 ÷ 1,000 shares)…………… 7,032
Total cost……………………………………………… $82,172
Oct. 12 Cash* 408
Dividend Revenue 408
* 800 shares × $0.51