Tidewater Management, Inc. had no investments in short-term marketable securities prior to 2013. During 2013, the company engaged in the following investment transactions:
1.Purchased 300 shares of Toucan Taxi Company stock for $14 per share.
2.Received a $2.50 per share dividend on the Toucan Taxi stock.
3.Sold 200 shares of the Toucan Taxi stock for $16 per share.
At the end of 2013, the Toucan Taxi stock had a market value of $15 per share.
A)Prepare journal entries for each of the three transactions assuming they are available-for-sale securities.
B)Prepare journal entries, if required, to recognize the year-end market value. What is the income statement effect of the entry, if any?
C)How will this investment be reported on the company's balance sheet at December 31, 2013?
Correct Answer:
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