B-06.06 Problem

B-06.06 Problem - You should prepare journal entries to...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
B-06.06 Piven Mining Corporation holds significant limestone deposits. One of its key customers, Kuai Oil, produces crude oil from shale deposits. This production process requires limestone, and Piven is seeing a large increase in order flow from Kuai and other shale companies. Piven's management believes Kuai's stock is undervalued, and has decided to invest excess cash in the stock of Kuai Oil. The intent of this investment is for "trading" purposes only. Following are detailed facts about the Kuai investment.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: You should prepare journal entries to record the investment, and necessary end-of-month adjusting entries to reflect changes for each month. May 7 Purchased 500,000 shares of Kuai Oil at $7 per share. May 31 The fair value of Kuai's stock was $9 per share. June 30 The fair value of Kuai's stock was $5 per share. July 15 Received a dividend from Kuai of $0.10 per share. July 31 The fair value of Kuai's stock was $8 per share....
View Full Document

This note was uploaded on 02/29/2012 for the course ACCOUNTING 101 taught by Professor Hudack during the Spring '11 term at FIU.

Ask a homework question - tutors are online