In February 2014, ABC Inc.invested excess cash in shares of PLZ Corporation, a publicly traded company with over 1,000,000 shares outstanding. ABC Inc. bought 2,700 shares at $11.65 per share. The shares were bought on speculation that they would increase in value, as analyst valuations for the next 12 months were that the shares would trade in the $31 to $36 range. Brokerage costs were $0.05 per share plus a flat fee of $29.00. The closing price of the shares and the dividends per share are as follows for the quarter-ends:
The following are the balances from the Trial Balance of ABC Inc.
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Debit
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Credit
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Investment in PLZ shares (at FVPL)
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84,240.00
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Gain (loss) on investment in PLZ shares
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52,785.00
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Investment transaction costs
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164.00
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Required
Prepare the required adjusting entries for 2014 and complete the following table:
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Date
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Number of shares
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Closing value on stock exchange
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Dividend / share
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Fair value
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Dividend income
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Gain or Loss through P&L
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February 17, 20X4
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Purchase
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2,700
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$11.65
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March 31, 20X4
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$16.20
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$0.24
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June 30, 20X4
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$22.75
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$0.25
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September 30, 20X4
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$31.20
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$0.26
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December 31, 20X4
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$29.85
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$0.26
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$0.00
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$0.00
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