Question 5:
Bellami Corporation had the following transactions:
Sept. 2 Purchased 1,250 Frater Corp. common shares for $98,000 with the intention of
trading them.
Oct. 12 Received a dividend on the Frater shares of $0.80 per share.
22 Sold half of the investment in Frater shares at $82 per share.
Dec.30 Frater declared a dividend of $0.92 per share, payable next year.
Required:
(a) Record the above transactions. (8 marks)
(b) Prepare the adjusting entry for the valuation of the investment on December 31, Bellami's
year end, assuming the remaining Frater shares are worth $85 each on December 31. (2
marks)