Identify the income statement and balance sheet, Cost Accounting

Assignment Help:

In January 2012, the management of Stefan Company concludes that it has sufficient cash to permit some short-term investments in debt and stock securities. During the year, the following transactions occurred.

Feb. 1 Purchased 600 shares of Superior common stock for $31,800, plus brokerage fees of $600.

Mar. 1 Purchased 800 shares of Pawlik common stock for $20,000, plus brokerage fees of $400.

Apr. 1 Purchased 50 $1,000, 7% Venice bonds for $50,000, plus $1,000 brokerage fees. Interest is payable semiannually on April 1 and October 1.

July 1 Received a cash dividend of $0.60 per share on the Superior common stock.

Aug. 1 Sold 200 shares of Superior common stock at $58 per share less brokerage fees of $200.

Sept. 1 Received a $1 per share cash dividend on the Pawlik common stock.

Oct. 1 Received the semiannual interest on the Venice bonds.

Oct. 1 Sold the Venice bonds for $50,000 less $1,000 brokerage fees.

At December 31, the fair value of the Superior common stock was $55 per share. The fair value of the Pawlik common stock was $24 per share.

Instructions

(a) Journalize the transactions and post to the accounts Debt Investments and Stock Investments. (Use the T-account form.)(a) Gain on stock sale $600 use T-account form

(b) Prepare the adjusting entry at December 31, 2012, to report the investment securities at fair value. All securities are considered to be trading securities.

(c) Show the balance sheet presentation of investment securities at December 31, 2012.

(d) Identify the income statement accounts and give the statement classification of each account.


Related Discussions:- Identify the income statement and balance sheet

Determine the current ratio, When firms enter into loan agreements with the...

When firms enter into loan agreements with their bank it is very common for the agreement to have a restriction on the minimum current ratio the firm has to maintain. So, it is imp

Determine the expected rate of growth of dividends, General Motors has to r...

General Motors has to raise new capital in one of the following three ways. Using the income tax rate of 32%, find the after-tax cost of new capital in each case. (A) Sell commo

Sources and uses of cash, There are different activities undertaken through...

There are different activities undertaken through a business that prove to be either source or use of cash. These can be categorizes under three broad categories that are: investin

The fixed overhead price variance, DEF Municipality uses a standard absorpt...

DEF Municipality uses a standard absorption costing system to control the cost of one of its services, namely the supply of water to its constituents. The fixed budget for the reti

The overhead cost variances , The following facts have been extracted fr...

The following facts have been extracted from the standard cost card for product X:

Estimate the growth rate of stock, Estimate the Growth rate of stock ...

Estimate the Growth rate of stock Data stock price = 53 rate of return= 12% expected dividend = 3.15 Formula : Expected return  = (dividend paid + capital

Compute the irr, Matheson Electronics' Canadian Branch will help introduce ...

Matheson Electronics' Canadian Branch will help introduce into Canada the just developed new electronic device which, when mounted on an automobile, will tell the driver how many m

Internal sources of funds, While we are looking for sources funds it is oth...

While we are looking for sources funds it is other than natural to start searching from home. What do we have? During examining the requirement for working capital we could also ma

What percent of the cost of property, In Lowe's Companies, Inc. 2012 Annual...

In Lowe's Companies, Inc. 2012 Annual Report (Form 10-K) 1. Evaluate Lowe's investment in property, plant and equipment. Determine the following amounts as reported by Lowe's on it

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd