On January 15, 2020 bieber co purchased 30,000 shares of Hand Co. at $35 per share, paying $10,000 in commissions to the broker of the deal. On March 17, 2020, Hand Co. paid a cash dividend of $2.50 per share. The fair value of the Hand Co. stock at the end of 2020 was $38 per share. During 2020, Hand Co. had net income of $3,000,000. Prepare the journal entries for Bieber Co. for the above transaction assuming the amount of shares purchased represents less than 20% of Hand Co. outstanding stock.

On January 15, 2020 bieber co purchased 30,000 shares of Hand Co. at $35 per share, paying $10,000 in commissions to the broker of the deal. On March 17, 2020, Hand Co. paid a cash dividend of $2.50 per share. The fair value of the Hand Co. stock at the end of 2020 was $38 per share. During 2020, Hand Co. had net income of $3,000,000. Prepare the journal entries for Bieber Co. for the above transaction assuming the amount of shares purchased represents less than 20% of Hand Co. outstanding stock.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 14RE

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Monona Company reported net income of 29,975 for 2019. During all of 2019, Monona had 1,000 shares of 10%, 100 par, nonconvertible preferred stock outstanding, on which the years dividends had been paid. At the beginning of 2019, the company had 7,000 shares of common stock outstanding. On April 2, 2019, the company issued another 2,000 shares of common stock so that 9,000 common shares were outstanding at the end of 2019. Common dividends of 17,000 had been paid during 2019. At the end of 2019, the market price per share of common stock was 17.50. Required: 1. Compute Mononas basic earnings per share for 2019. 2. Compute the price/earnings ratio for 2019.
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