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Wallace Company

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Wallace Company had the following transactions pertaining to stock investments.

Feb. 1 Purchased 800 shares of Betz common stock (2%) for $8,000 cash, plus
Brokerage fees of $200.
July 1 Received cash dividends of $1 per share on Betz common stock.

Sept. 1 Sold 400 shares of Betz common stock for $4,400, less brokerage fees of $100.

Dec. 1 Received cash dividends of $1 per share on Betz common stock.

Instructions:

(a) Journalize the transactions.

(b) Explain how dividend revenue and the gain (loss) on sale should be reported in the income statement.

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