On December 31, 1997, Harmony Associates owned the following securities that are held as long-term investments: On
Question:
On December 31, 1997, Harmony 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 1998 these transactions occurred:
At December 31 the fair values per share of the common stocks were: A Co. \$47, B Co. \(\$ 6\), and C Co. \(\$ 18\).
\section*{Instructions}
(a) Journalize the 1998 transactions and post to the account Stock Investments. (Use the \(\mathrm{T}\) account form.)
(b) Prepare the adjusting entry at December 31, 1998, 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, 1998. At this date Harmony Associates has common stock \(\$ 2,000,000\) and retained earnings \(\$ 1,200,000\).
Step by Step Answer:
Financial Accounting Tools For Business Decision Making
ISBN: 9780471169192
1st Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso