Slip Systems had no short-term investments prior to 2013. It had the following transactions involving short-term investments
Question:
Slip Systems had no short-term investments prior to 2013. It had the following transactions involving short-term investments in available-for-sale securities during 2013.
Required 1. Prepare journal entries to record the preceding transactions and events.
2. Prepare a table to compare the year-end cost and fair values of the short-term investments in available-for-sale securities. The year-end fair values per share are; Nokia, $40.25; Dell, $40.50; and Merck, $59.
3. Prepare an adjusting entry, if necessary, to record the year-end fair value adjustment for the portfolio of short-term investments in available-for-sale securities.
Anaiysis Component 4. Explain the balance sheet presentation of the fair value adjustment to 81ip’s short-term investments.
5. How do these short-term investments affect
(a) its income statement for year 2013 and {b) the equity section of its balance sheet at the 2013 year-end?
Step by Step Answer:
Fundamental Accounting Principles Volume 2
ISBN: 9780077716660
21st Edition
Authors: John Wild, Ken Shaw, Barbara Chiappetta