Table 16-6

the Following Are Transactions in the Purchase

question 124

Essay

Table 16-6

The following are transactions in the purchase and sale of Epstein Ltd. shares by Monty Inc.

$\begin{array}{ll}\hline \text { Januluary } 15,2017 & \text { Purchased 2,000 shares of Straton at } \$ 20.00 \text { and paid } \$ 125 \text { in brokerage fees } \\\text { February } 10,2017 & \text { Received } \$ 1.00 \text { dividend from Straton. } \\\text { December } 31,2017 & \text { Straton reported net income of } \$ 6,000 \text {. } \\\text { December 31, 2017 } & \text { Market value of Straton shares } \$ 22.00 . \\\text { June 30, 2018 } & \text { Sold all shares of Straton for } \$ 21.00 \text { per share. }\end{array}$
Record the journal entries for the above transactions for Samuels Inc.
$\begin{array}{ll}\text { January 15, 2017 } & \text { Purchase 1, 000 shares of Epstein at \$25.00 } \\\text { February 10, 2017 } & \text { Received \$1.00 dividend from Epstein } \\\text { December 31, 2017 } & \text { Epstein reported net income of \$10,000. } \\\text { December 31, 2017 } & \text { Market value of Epstein shares \$24.50. } \\\text { June 30, 2018 } & \text { Sold all shares of Epstein for \$26.50 per share. }\end{array}$
Record the journal entries for the above transactions for Monty Inc.
-Refer to Table 16-6.Assume that the investment in Epstein shares is classified as a long-term investment.Monty exercises significant influence over Epstein by owning 25% of the outstanding shares.Assume that Epstein earned no income from January 1,2018 to June 30,2018,nor did it pay any dividends during that period.

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Definitions:

Domestic Market

The marketplace within a country's borders where goods and services are bought and sold, as opposed to international or export markets.

Purchasing Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach to assess its relative purchasing power.

Price Level

An index that measures the average prices of goods and services in an economy at a given time, providing insight into inflationary trends.

Exchange Rate

The exchange rate is the price at which one currency can be exchanged for another currency, affecting trade and economic relations between countries.