Prepare General Journal Entries to Record the Following Transactions for the Elite

question 30

Essay

Prepare general journal entries to record the following transactions for The Elite Corp in its first year of operations:
(a)On May 4,as a short term investment purchased 700 shares of Value Corp.for $70/share,paying a $500 brokerage fee.
(b)On July 1,received $2.00 per share cash dividend on the Value Corp.shares.
(c)On September 15,sold 500 Value Corp.shares for $120 per share,incurring a $500 brokerage fee.
(d)The December 31 fair value of the company's short-term investment in Value Corp revealed a $2,000 unrealized gain.

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Definitions:

Cash Collections

The process or amount of collecting received payments from customers, typically for goods sold or services rendered.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption or wear and tear.

Cash Budget

A detailed plan showing how cash resources will be acquired and used over a specific time period.

Disbursements

The act of paying out money from a fund or account, typically for expenses or investments.