On December 31, 2011, Maxell Associates owned the following securities that are held as long-term investments. On
Question:
On December 31, 2011, Maxell Associates owned the following securities that are held as long-term investments.
On this date, the total fair value of the securities was equal to its cost. The securities are not held for influence or control over the investees. In 2012, the following transactions occurred. July 1 Received $2.00 per share semiannual cash dividend on B Co. common stock.Aug. 1 Received $0.50 per share cash dividend on A Co. common stock.Sept. 1 Sold 1,000 shares of B Co. common stock for cash at $9 per share less brokerage fees of $800.Oct. 1 Sold 300 shares of A Co. common stock for cash at $54 per share less brokerage fees of $600.Nov. 1 Received $1 per share cash dividend on C Co. common stock.Dec. 15 Received $0.50 per share cash dividend on A Co. common stock.31 Received $2.20 per share semiannual cash dividend on B Co. common stock.At December 31, the fair values per share of the common stocks were: A Co. $47, B Co. $7, and C Co. $24.Instructions(a) Journalize the 2012 transactions and post to the account Stock Investments. (Use theT account form.)(b) Prepare the adjusting entry at December 31, 2012, to show the securities at fair value.The stock should be classified as available-for-sale securities.(c) Show the balance sheet presentation of the investments and the unrealized gain (loss) at December 31, 2012. At this date, Maxell Associates has common stock $2,000,000 and retained earnings$1,200,000.
StocksStocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Financial Accounting Tools for business decision making
ISBN: 978-0470534779
6th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso