During the most recent year, Smither Travelers Co. bought 3,400 shares of German Corporation common stock at

Question:

During the most recent year, Smither Travelers Co. bought 3,400 shares of German Corporation common stock at $37, 630 shares of British Corporation stock at $47.00, and 1,400 shares of Milan Corporation stock at $76. At December 31, Hoover’s Online reports German stock at $28.88, British at $49.00, and Milan at $69.25. Smither Travelers does not own more than 10% of the outstanding stock in any of its investments.


Requirements

1. Determine the cost and the fair value of the long-term investment portfolio at December 31.

2. Record Smither Travelers’ adjusting entry at December 31.

3. What would Smither Travelers report on its income statement and balance sheet at year-end for the information given? Ignore income taxes.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial Accounting

ISBN: 978-0134725987

12th edition

Authors: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.

Question Posted: