Nama: Mayla Nurwahidiah

NPM: 2023220006

Soal 1
On April 25, Donnoly Company buys 4,200 ordinary shares of Carpenter for $92,500, plus
brokerage fees of $2,000. On October 31, Donnoly sells 600 shares of Carpenter for $15,500,
less brokerage fees of $500. Prepare journal entries for the purchase and sale of the Carpenter
shares.
Jawab:
Purchase:
Apr. 25 Share Investments $ 94.500
Cash $ 94.500
Sale:
Oct. 31 Cash $ 15.000
Gain on Sale of Share Investments $ 1.500
Share Investments $ 13.500

Soal 2
On January 1, Kingman Corporation purchased a 30% equity in Lewis Company for $360,000. At
December 31, Lewis declared and paid a $40,000 cash dividend and reported net income of
$98,000. Prepare the necessary journal entries for Kingman Corporation.
Jawab:
Jan. 1 Share Investments $ 360.000
Cash $ 360.000
Dec. 31 Cash $ 12.000
Share Investments $ 12.000
(To record dividends received)
Dec. 31 Share Investments $ 29.400
Revenue from Share Investments $ 29.400
(To record 30% equity in Kingman net income)

Soal 3
Stein Company had the following transactions pertaining to its short-term share investments.
Jan. 1 Purchased 600 ordinary shares of Pine Company for $7,000 cash plus brokerage fees of $350.
Jun. 1 Received cash dividends of $0.60 per share on the Pine Company shares.
Sept. 15 Sold 300 shares of Pine Company for $3,600 less brokerage fees of $200.
Journalize the transactions.
Jawab:
Jan. 1 Share Investments $ 7.350
Cash $ 7.350
Jun. 1 Cash $ 360
Dividend Revenue $ 360
Sept. 15 Cash $ 3.400
Loss on Sale of Share Investments $ 275
Share Investments $ 3.675
Soal 4
On January 1, 2011, Nott Company purchased 5,000 ordinary shares of Ace Company for
$300,000. Nott’s investment represents 40 percent of the total outstanding shares of Ace. During
2011, Ace paid total dividends of $100,000 and reported net income of $250,000. What revenue
does Nott report related to this investment and what is the amount to be reported as the
Investment in Ace at December 31?
Jawab:
Revenue for 2011 ($250.000 x 40%) $ 100.000
Therefore, Nott reports $100.000 as revenue from its investment in Ace Company.

Balance in Investment account

Purchase price $ 300.000
Less: dividend receipt ($100,000 × .40) $ 40.000
Add: investment revenue ($250,000 × .40) $ 100.000
Ending balance Investment in Ace $ 360.000
Therefore, at December 31, 2011, Nott Company will report the investment in Ace Company at $360.000.

Soal 5
At January 1, 2011, the fair value through profit or loss securities portfolio held by the Darin
Corporation consisted of the following investments:
1. 2,000 ordinary shares of Tanner purchased for ₤42 per share.
2. 1,500 ordinary shares of Lester purchased for ₤50 per share.
At December 31, 2011, the fair values per share were Tanner ₤38 and Lester ₤54.
Instructions
(a) Prepare a schedule showing the cost and fair value of the portfolio at December 31, 2011.
(b) Prepare the adjusting entry to report the portfolio at fair value at December 31, 2011.
Jawab:
(a) Prepare a schedule showing the cost and fair value of the portfolio at December 31, 2011.

Unrealized
Investments Cost Fair Value
Gain (Loss)
Tanner shares € 84.000 € 76.000 -€ 8.000
Lester shares € 75.000 € 81.000 € 6.000
Total € 159.000 € 157.000 -€ 2.000
(b) Prepare the adjusting entry to report the portfolio at fair value at December 31, 2011.
Dec. 31 Unrealized Loss—Income € 2.000
(2011) Fair Value Adjustment € 2.000