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Harlamova29_29 [7]
3 years ago
5

Prepare Hertog Company’s journal entries to reflect the following transactions for the current year. May 7 Purchases 200 shares

of Kraft stock as a short-term investment in trading securities at a cost of $50 per share plus $300 in broker fees. June 6 Sells 200 shares of its investment in Kraft stock at $56 per share. The broker’s commission on this sale is $150.
Short-term Investments—Trading (Kraft)?
Gain on sale of short-term investments ?
Business
1 answer:
Mrrafil [7]3 years ago
4 0

Answer:

Explanation:

Prepare Hertog Company’s journal entries to reflect the following transactions for the current year.

1. May 7 Purchases 200 shares of Kraft stock as a short-term investment in trading securities at a cost of $50 per share plus $300 in broker fees.

Dr Short Term Investments..............................10,000

Dr Broker Fess..........................................................300

Cr. Cash.................................................................................10,300

<em>Being purchase of 200 shares of Kraft stock as a short-term investment in trading securities at a cost of $50 per share plus $300 in broker fees</em>

<em />

2. June 6 Sells 200 shares of its investment in Kraft stock at $56 per share. The broker’s commission on this sale is $150.

Dr Cash................................................................11,050

Dr Broker Fess........................................................150

Cr. Cash............................................................................10,000

Cr. Gain on Sale of Short-term investments..............1,200

Being Sale of 200 shares of its investment in Kraft stock at $56 per share. The broker’s commission on this sale is $150

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1            $50,000      $8,900        $41,100             $8,090.91

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Under Double declining depreciation:

Depreciation rate per year = (1 ÷ Useful  Life) × 100

= 1 ÷ 5 × 100

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Now for double-declining, the rate is doubled

So,

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1            $50,000      $20,000       $30,000           $18,181.82

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