Asked by Cheyenne Doyen on Jun 08, 2024
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As a long-term investment,Martha Company purchased 5,000 of the 12,500 outstanding voting shares of Stewart Corporation at $20 per share on January 1,2019.At the end of 2019,Stewart reported net income of $100,000 and declared and paid dividends of $10,000.The market price of the Stewart stock at the end of 2019 was $23 per share.
Calculate the net balance in Martha's investment account at the end of 2019.
Voting Shares
Shares that give the shareholder the right to vote on matters of corporate policy and the composition of the members of the board of directors.
Investement Account
An account held at a financial institution that contains securities, cash, and other assets that an individual or entity is investing in.
- Identify the differences in accounting practices for diverse kinds of securities.
- Construct the essential journal entries for the acquisition and liquidation of securities.
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Learning Objectives
- Identify the differences in accounting practices for diverse kinds of securities.
- Construct the essential journal entries for the acquisition and liquidation of securities.
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