(APPENDIX) INVESTMENTS IN TRADING SECURITIES Maxwell Company engaged in the following transactions involving short-term investments: a. Purchased...
Question:
(APPENDIX) INVESTMENTS IN TRADING SECURITIES Maxwell Company engaged in the following transactions involving short-term investments:
a. Purchased 200 shares of Bartco stock for $12,800.
b. Received a $1.60-per-share dividend on the Bartco stock.
c. Sold 40 shares of the Bartco stock for $61 per share.
d. Purchased 380 shares of Newton stock for $20,900.
e. Received a dividend of $1.00 per share on the Newton stock.
At December 31, the Bartco stock has a market value of $60 per share, and the Newton stock has a market value of $59 per share.
Required:
. Prepare entries for Maxwell’s journal to record these transactions assuming they are trading securities.
. Calculate the market value of Maxwell’s short-term investment portfolio at December 31.
. Provide the necessary adjusting entry at December 31.
. What is the income statement effect of the adjusting entry?
. How would these investments be reported on the December 31 balance sheet?
Problem Set B
Step by Step Answer:
Cornerstones Of Financial Accounting Current Trends Update
ISBN: 9781111527952
1st Edition
Authors: Jay Rich , Jeff Jones, Maryanne Mowen , Don Hansen