(APPENDIX) INVESTMENTS IN AVAILABLE-FOR-SALE SECURITIES Williams Corporation acquired the following equity securities during 2009:

200 shares of Southwestern Company capital stock $14,600 500 shares of Montgomery Products capital stock 14,500 Williams’s investment in both of these companies is passive and Williams classifies these securities as available-for-sale. During 2009, Southwestern paid a dividend of

$1.20 per share, and Montgomery paid a dividend of $1.80 per share. At December 31, 2009, the Southwestern stock has a market value of $75 per share, and the Montgomery stock has a market value of $25 per share.

Required:

. Prepare entries for Williams’s journal to record these two investments and the receipt of the dividends.

. Calculate the market value of Williams’s investment portfolio at December 31, 2009.

. Provide the necessary adjusting entry at December 31, 2009.

. How would these securities be disclosed on the December 31, 2009, balance sheet?

Problem Set A