For Each Situation, Give the Appropriate Journal Entry(s)

question 128

Essay

For each situation, give the appropriate journal entry(s). Assume the cost method is used.
(a) On January 1, 2013, Investor A purchased (for cash) a long-term investment, 1,000 shares (1 percent) of 6 percent, cumulative, preferred shares of Corporation B at $48 per share, when one year of dividends was in arrears.
(b) On March 1, 2013, Investor A received a 100 percent stock split on the B stock.
(c) On December 31, 2014, Investor A received notice that the board of directors of Corporation B had declared cash dividends on the preferred stock sufficient to cover the arrears and the current year.

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Definitions:

Power Distance

A cultural dimension that describes the extent to which individuals in a society accept and expect that power is distributed unequally.

Future Orientation

The extent to which individuals or cultures prioritize and value actions or decisions that pertain to future outcomes and goals.

Polychronic Time

A perception of time that values multi-tasking and flexible scheduling, common in cultures that prioritize relationships over strict adherence to schedules.

Monochronic Time

A cultural approach to time management that emphasizes doing one task at a time.