Concept explainers
Stock dividends received on investments; integrative problem
• LO18–8
Ellis Transport Company acquired 1.2 million shares of stock in L&K Corporation at $44 per share. They are classified by Ellis as “available for sale.” Ellis sold 200,000 shares at $46, received a 10% stock dividend, and then later in the year sold another 100,000 shares at $43.
Hint: There is no entry for the stock dividend, but a new investment per share must be calculated for use later when the shares are sold.
Required:
Prepare
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