AccountingAbco Corporation declared a $5 per share dividend on September 15. The dateof record for the dividend was October 1 (the stock began selling ex-dividendon October 2). The dividend was paid on October 15. Jonas is a cash-methodtaxpayer. Determine if he must include the dividends in gross income under thefollowing circumstances:Jonas bought 100 shares of Abco stock on September 10 for $40 per share. Hereceived a $500 dividend on October 15. Jonas still owns the shares at year-end.Jonas bought 100 shares of Abco stock on August 22 for $40 per share. Jonassold his Abco shares on October 5 for $50 per share. Jonas received the $500dividend on October 15 (note that even though he didn't own the stock onOctober 15, he still received the dividend because he was the shareholder on therecord date).Jonas bought 100 shares of Abco stock for $64 per share on August 10. Hereceived the $100 dividend on October 15. Jonas still owns the shares at year-end.

A dividend represents a payment paid to shareholders by a firm. It is a part of the firm's profits…

Answered: Accounting Abco Corporation declared a…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 14P

See similar textbooks

Similar questions

Nasser Inc. had the following transactions pertaining to stock investments. Jan. 1 Purchased 3,500 shares of Eshaq Corporation common stock (5%) for $212,625 cash, plus brokerage fees of $875. July 1 Received cash dividends of $4 per share on Eshaq common stock. Nov. 1 Sold 500 shares of Eshaq common stock for $32,100, less brokerage fees of $100. Dec. 1 Received cash dividends of $4 per share on Eshaq common stock. Instructions Journalize the transactions.
Ayayai Corporation purchased 420 shares of Sherman Inc. common stock for $12,300 (Ayayai does not have significant influence). During the year, Sherman paid a cash dividend of $3.50 per share. At year-end, Sherman stock was selling for $31.50 per share. Prepare Ayayai's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Account Titles and Explanation (a) (b) (c) Debit Credit
(b) Assume that the stock acquired by Ball represents 30% of Leftwich's voting stock and that Ball accounts for this investment using the equity method since it is able to exert significant influence. Use the financial statement effects template (with amounts and accounts) to record the following transactions: (1) Ball purchased 10,000 common shares of Leftwich at $15 cash per share. (2) Leftwich reported annual net income of $40,000. (3) Ball received a cash dividend of $1.20 per common share from Leftwich. (4) Year-end market price of Leftwich common stock is $19 per share. Use negative signs with answers, when appropriate. Balance Sheet Transaction Cash Asset + 150,000 (1) (2) (3) (4) 0 0 12,000 Noncash Assets = Liabilities + 150,000 12,000 (12,000) 0 0 0 0 0 Earned Contributed Capital + Capital 0 0 0 0 0 120,000 0 0 Revenue Income Statement 0 12,000 0 0 Expenses 0 0 0 0 Net Income 0 12,000 0 0
Mr. Anton ordered to his stockbroker to buy 1,000 Ayala Land shares at a market price of P36.00/share. His stockbroker executed the order and the transaction was done during the day. How much should Mr. Antonr pay to his broker on settlement date assuming that his stockbroker charge him a commission fee of 1/4 of 1%, and Mr. Anton requested that the shares be registered under his name. a. 36,270.22 b. 36,108.22 c. 36,158.22 d. 36,179.90
On July 7, Splish Ltd. purchased 1,100 common shares in a privately-owned company named TWR Ltd. As the TWR shares were not traded on any stock exchange, Splish elected to account for the investment using the cost method. The price of the shares was $7.51 per share, plus a 3% commission charged by the broker who arranged the purchase. On September 1, TWR Ltd. declared dividends of $0.63 per share, paid on September 30. On November 15, Splish sold 1,023 of the shares for $8.30 per share; again, there was a 2% commission on the sale. Prepare the journal entries on the books of Splish to record the above transactions.
On January 1, 20X8, Ball Corporation purchased shares of Leftwich Company common Stock. Assume the stock acquired by Ball represents 15% of Leftwich’s voting stock and that Ball has no influence over Leftwich’s business decisions. Use the financial statement effects template (with amounts and accounts) to record the following transactions. Ball purchased 5,000 common shares of Leftwich at $15 cash per share. Leftwich reported annual net income of $40,000. Ball received a cash dividend of $1.10 per common share from Leftwich. Year-end market price of Leftwich common stock is $19.00 per share. Assume that the stock acquired by Ball represents 30% of Leftwich’s voting stock and that Ball accounts for this investment using the equity method because it is able to exert significant influence. Use the financial statement effects template (with amounts and accounts) to record the following transactions. Ball purchased 5,000 common shares of Leftwich at $15 cash per share. Leftwich…
Carla, Inc. purchased 1,810 shares of Oneida Corporation common stock for $84,600. During the year. Oneida paid a cash dividend of $1.10 per share. At year-end, Oneida stock was selling for $43.90 per share. Prepare Carla's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) (a) (b) (c) Account Titles and Explanation Debit Credit
Prepare Riley Company’s journal entries to record the following transactions for the current year. Apr. 18 Purchases 300 common shares of XLT Co. as a short-term investment at a cost of $42 per share. With this stock investment, Riley has an insignificant influence over XLT. May 30 Receives $1 per share from XLT in dividends.
Oriole Inc. had the following transactions pertaining to investments in common stock. Jan. 1 Purchased 4,400 shares of Escalante Corporation common stock (4%) for $267,520 cash. July 1 Received a cash dividend of $5 per share. Dec. 1 Sold 880 shares of Escalante Corporation common stock for $56,320 cash. Dec. 31 Received a cash dividend of $5 per share. Journalize the transactions. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit
On March 22, purchased 860 shares of RPI Company stock at $21 per share. Duke's stock investment results in it having an insignificant influence over RPI. On July 1, received a $3 per share cash dividend on the RPI stock purchased in part a. On October 8, sold 430 shares of RPI stock for $31 per share. Prepare journal entries to record the given transactions involving the short-term stock investments of Duke Company, all of which occurred during the current year. 1 On March 22, purchased 860 shares of RPI Company stock at $21 per share. Duke's stock investment results in it having an insignificant influence over RPI. 2 On July 1, received a $3 per share cash dividend on the RPI stock purchased in part a. 3 On October 8, sold 430 shares of RPI stock for $31 per share.
Ayayai Corporation purchased 300 common shares of Sigma Inc. for trading purposes for $9,300 on September 8 and accounted for the investment under ASPE at FV-NI. In December, Sigma declared and paid a cash dividend of $1.65 per share. At year end, December 31, Sigma shares were selling for $35.60 per share. In late January, Ayayai sold the Sigma shares for $34.60 per share. Prepare Ayayai Corporation’s journal entry to record the purchase of the investment. (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.) Date Account Titles and Explanation Debit Credit September 8 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount Prepare Ayayai Corporation’s journal entry to record the dividends received. (Credit…
During the year, the following selected transactions affecting stockholders' equity occurred for Navajo Corporation: a. Feb. 1 Repurchased 100 shares of the company's own common stock at $20 cash per share. b. Jul. 15 Sold 60 of the shares purchased on February 1 for $21 cash per share. c. Sept. 1 Sold 30 of the shares purchased on February 1 for $19 cash per share. Prepare the journal entry required for each of the above transactions.

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SEE MORE TEXTBOOKS