Project #44437 - acct

Debt Investment Transactions, Available-for-Sale Valuation

Dollar Mart Inc. is a general merchandise retail company that began operations on January 1, 2014. The following transactions relate to debt investments acquired by Dollar Mart Inc., which has a fiscal year ending on December 31:

2014  
May 1 Purchased $36,000 of Elkin City 4%, 10-year bonds at their face amount plus accrued interest of $240. The bonds pay interest semiannually on March 1 and September 1.
June 16 Purchased $128,000 of Morgan Co. 6%, 12-year bonds at their face amount plus accrued interest of $320. The bonds pay interest semiannually on June 1 and December 1.
Sep. 1 Received semiannual interest on the Elkin City bonds.
Oct. 1 Sold $14,400 of Elkin City bonds at 104 plus accrued interest of $48.
Dec. 1 Received semiannual interest on Morgan Co. bonds.
Dec. 31 Accrued $288 interest on Elkin City bonds.
Dec. 31 Accrued $640 interest on Morgan Co. bonds.
2015  
Mar. 1 Received semiannual interest on the Elkin City bonds.
June 1 Received semiannual interest on the Morgan Co. bonds.

Required:

Journalize the entries to record these transactions. For a compound transaction, if an amount box does not require an entry, leave it blank.

DateAmountDebitCredit
2014      
May 1
 
 
 
June 16
 
 
 
Sep. 1
 
 
 
Oct. 1
 
 
 
 
Dec. 1
 
 
 
Dec. 31 Elkin City  
   
 
Dec. 31 Morgan Co.  
   
 
2015      
Mar. 1
 
 
 
June 1
 
 

Stock Investment Transactions, Trading Securities

Ophir Investments Inc. is a regional investment company that began operations on January 1, 2014. The following transactions relate to trading securities acquired by Ophir Investments Inc., which has a fiscal year ending on December 31:

2014
Feb. 3. Purchased 3,100 shares of Mapco Inc. as a trading security at $31 per share plus a brokerage commission of $620.
Mar. 23. Purchased 1,500 shares of Swift Inc. as a trading security at $12 per share plus a brokerage commission of $300.
May 19. Sold 700 shares of Mapco Inc. for $32 per share less an $90 brokerage commission.
June 12. Received an annual dividend of $0.12 per share on Mapco stock.
Dec. 31. The portfolio of trading securities was adjusted to fair values of $35 and $13 per share for Mapco Inc. and Swift Inc., respectively.
2015  
Apr. 9. Purchased 1,400 shares of Corvair Inc. as a trading security at $36 per share plus a $210 brokerage commission.
June 15. Received an annual dividend of $0.15 per share on Mapco Inc. stock.
Aug. 30. Sold 300 shares of Corvair Inc. for $30 per share less a $90 brokerage commission.
Dec. 31. The portfolio of trading securities had a cost of $132,945 and fair value of $128,800, requiring a credit balance in Valuation Allowance for Trading Investments of $4,145 ($132,945 - $128,800). Thus, the debit balance from December 31, 2014 is to be adjusted to the new balance.

Required:

1.  Journalize the entries to record these transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. In your computations, round per share amounts to two decimal places. When required, round final answers to the nearest dollar.


DateAmountDebitCredit
2014      
Feb. 3  
   
 
Mar. 23  
   
 
May 19
 
 
 
June 12  
   
 
Dec. 31  
   
 
2015
Apr. 9  
   
 
June 15  
   
 
Aug. 30
 
 
 
Dec. 31  
   

2.  Prepare the investment-related current asset balance sheet presentation for Ophir Investments Inc. on December 31, 2015.


Ophir Investments Inc.
Balance Sheet (selected Current Asset items)
December 31, 2015
Current Assets:
 
 
 

Stock Investment Transactions, Equity Method and Available-for-Sale Securities

Roman Products, Inc., is a wholesaler of men's hair products. The company began operations on January 1, 2014. The following transactions relate to securities acquired by Roman Products, Inc., which has a fiscal year ending on December 31:

2014  
Jan. 3 Purchased 6,400 shares of Whalen Inc. as an available-for-sale security at $48 per share, including the brokerage commission.
July 8 Received a cash dividend of $0.65 per share on the Whalen stock.
Oct. 19 Sold 2,900 shares of Whalen Inc. stock at $51 per share, less a brokerage commission of $60.
Dec. 12 A cash dividend of $0.65 per share was received on the Whalen stock.
Dec. 31 Whalen Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $45 per share. 
Use the valuation allowance for available-for-sale investments account in making the adjustment.
2015  
Jan. 5 Purchased an influential interest in Tasmania Inc. for $650,000 by purchasing 68,000 shares directly from the 
estate of the founder of Tasmania Inc. There are 170,000 shares of Tasmania Inc. stock outstanding.
July 9 Received a cash dividend of $0.75 per share on Whalen Inc. stock.
Dec. 8 Received a cash dividend of $0.75 per share plus an extra dividend of $0.15 per share on Whalen Inc. stock.
Dec. 31 Received $20,000 of cash dividends on Tasmania Inc. stock. Tasmania Inc. reported net income of $82,000 in 2015. 
Roman Products uses the equity method of accounting for its investment in Tasmania Inc.
Dec. 31 Whalen Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $52 per share. Use the valuation 
allowance for available-for-sale investments account in making the adjustment for the change in fair value from $45 to $52 per share.

Required:

1.  Journalize the entries to record the preceding transactions. For a compound transaction, if an amount box does not require an entry, leave it blank.


DateAmountDebitCredit
2014      
Jan. 3  
   
 
July 8  
   
 
Oct. 19
 
 
 
Dec. 12  
   
 
Dec. 31  
   
 
2015      
Jan. 5  
   
 
July 9  
   
 
Dec. 8  
   
 
Dec. 31-Dividends  
   
 
Dec. 31-Income  
   
 
Dec. 31-Valuation  
   

2.  Prepare the investment-related asset and stockholders' equity balance sheet presentation for Roman Products, Inc., on December 31, 2015, assuming the Retained Earnings balance on December 31, 2015, is $475,000.


Roman Products, Inc.
Balance Sheet (selected items)
December 31, 2015
Current Assets:
 
 
 
Investments:
 
Stockholders' Equity:
 
 

Investment Reporting

Luminous Publishing, Inc., is a book publisher.

Note 1. Investments are classified as available for sale. The investments at cost and fair value on December 31, 2014, are as follows:

      No. of Shares     Cost per Share     Total Cost     Total Fair Value
Barns Co. Stock 1,800   $15   $27,000   $24,600  
Dynasty Co. Stock 900   36   32,400   30,300  
          $59,400   $54,900  

Note 2. The investment in Quest Co. stock is an equity method investment representing 30% of the outstanding shares of Quest Co.

The following selected investment transactions occurred during 2015:

2015  
May 5. Purchased 2,100 shares of Gypsy, Inc., at $28 per share including brokerage commission. Gypsy, Inc., is classified as an available-for-sale security.
Sept. 1. Purchased $36,000 of Norton Co. 5%, 10-year bonds at 100. The bonds are classified as available for sale. The bonds pay interest on September 1 and March 1.
Sept. 9. Dividends of $9,900 are received on the Quest Co. investment.
Dec. 31. Quest Co. reported a total net income of $91,000 for 2015. Luminous recorded equity earnings for its share of Quest Co. net income.
Dec. 31. Accrued four months of interest on the Norton bonds.
Dec. 31. Adjusted the available-for-sale investment portfolio to fair value using the
following fair value per-share amounts:

Available-for-Sale Investments Fair Value
Barns Co. stock $14 per share
Dynasty Co. stock $31 per share
Gypsy Inc. stock $29 per share
Norton Co. bonds 98 per $100 of face amount

Dec. 31. Closed the Luminous Publishing Inc. net income of $126,300 for 2015. Luminous paid no dividends during 2015.

Required:


  Hide    

The comparative unclassified balance sheets for December 31, 2015 and 2014 are provided below. Determine the missing amounts in the unclassified balance sheet. Do not round interim calculations. Round final answers to nearest dollar.



 Luminous Publishing, Inc. 
 Balance Sheet 
 December 31, 2015 and 2014 
   
 Dec. 31, 2015 
 
 Dec. 31, 2014 
 Cash 
 
 $195,000 
 
$ 178,600 
 Accounts Receivable (Net) 
 
 123,200 
 
 114,100 
 Available-for-Sale Investments (at Cost) - Note 1 
 
  
 
 59,400 
 Less Valuation Allowance for Available-for-Sale Investments 
 
  
 
 4,500 
 Available-for-Sale Investments (Fair Value) 
 
$  
 
$ 54,900 
 Interest Receivable 
 
$  
   
 Investment in Quest Co. Stock - Note 2 
 
  
 
 $ 62,300 
 Office Equipment (Net) 
 
 103,500 
 
 108,900 
 Total Assets 
 
$  
 
 $518,800 
 Accounts Payable 
 
 $ 66,300 
 
 $ 59,700 
 Common Stock 
 
 57,100 
 
 57,100 
 Excess of Issue Price Over Par 
 
 181,600 
 
 181,600 
 Retained Earnings 
 
  
 
 224,900 
 Unrealized Gain (Loss) on Available-for-Sale Investments 
 
  
 
 (4,500) 
 Total Liabilities and Stockholders' Equity 
 
$  
 
 $518,800 

 

 
 
 

Subject Business
Due By (Pacific Time) 10/23/2014 11:59 pm
Report DMCA
TutorRating
pallavi

Chat Now!

out of 1971 reviews
More..
amosmm

Chat Now!

out of 766 reviews
More..
PhyzKyd

Chat Now!

out of 1164 reviews
More..
rajdeep77

Chat Now!

out of 721 reviews
More..
sctys

Chat Now!

out of 1600 reviews
More..
sharadgreen

Chat Now!

out of 770 reviews
More..
topnotcher

Chat Now!

out of 766 reviews
More..
XXXIAO

Chat Now!

out of 680 reviews
More..
All Rights Reserved. Copyright by AceMyHW.com - Copyright Policy