Ex 178 eaton company had the following transactions

Ex. 178
Eaton Company had the following transactions pertaining to its short-term stock investments.
Jan. 1 Purchased 900 shares of Stafford Company stock for $11,880 cash.
June 1 Received cash dividends of $0.60 per share on the Stafford Company stock.
Sept. 15 Sold 450 shares of the Stafford Company stock for $5,200.
Dec. 1 Received cash dividends of $0.60 per share on the Stafford Company stock.
Instructions
(a) Journalize the transactions.
(b) Indicate the income statement effects of the transactions.
Ans: N/A, LO: 2, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Measurement, AICPA PC:
Problem Solving, IMA: FSA
FOR INSTRUCTOR USE ONLY
H-46

Reporting and Analyzing Investments
Solution 178 (10-15 min.)
H-47
Ex. 179
Grafton Company had the following transactions pertaining to its short-term stock investments.
Jan. 1 Purchased 2,000 shares of Hortez Company stock for $101,100 cash.
June 1 Received cash dividends of $2.70 per share on the Hortez Company stock.
Sept. 15 Sold 1,000 shares of the Hortez Company stock for $49,600.
Dec. 31 The fair values of the securities totaled $50,800. Prepare the adjusting entry to
report the portfolio at fair value.
Instructions
(a) Journalize the transactions.
(b) Indicate the income statement effects of the transactions.
Ans: N/A, LO: 2, 3, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Measurement, AICPA PC:
Problem Solving, IMA: FSA
FOR INSTRUCTOR USE ONLY

Test Bank for Financial Accounting: Tools for Business Decision Making, Eighth Edition