ACCT: 2100Spring 2016Appendix E Take Home QuizCatsclaw Enterprises, Inc. purchases debt securities to hold to maturity and equity securities areclassified as available for sale. At 1/1/15 Catsclaw held Woodwork?s bonds with a face value of$300,000. The bonds were purchased on March 31, 2014 with a 3.75% coupon rate. Theeffective rate of interest is 4%. Interest is payable on March 31 and September 30. The bondsmature on March 31, 2024. The following transactions relate to Catsclaw?s investment activityduring 2015.2015February 5 Purchased 5,000 Harold, Inc. common shares for $45,000.March 20 Purchased 300 shares of $200 par value, 6.5% preferred shares in ATCCorporation for $75,000.March 31 Received the interest payment on the Woodwork bonds.August 1 Received the annual cash dividend on the ATC preferred shares.September 30 Received the interest payment on the Woodwork bonds.October 5 Sold the Harold, Inc. common shares at $7 per share.November 8 Purchased 3,500 shares of Mayflag & Co. for $52,500.December 31 Market prices of the investment securities follow:Woodwork 103ATC $257Mayflag & Co. $12Required:a. Prepare the appropriate journal entry for each transaction or event.b. Prepare the necessary adjusting journal entries at December 31, 2015.c. Show the amounts that would be reported on the company?s December 31, 2014 and2015 balance sheet related to the investments. Comparable amounts should be displayedas they would be on a multiyear balance sheet. Be sure to include the appropriate sectionheadings. You may ignore income tax effects.d. Show the amounts that would be reported on the company?s 2015 statements of cash flowrelated to the investment activity. Be sure to include the appropriate section headings.Assume that Catsclaw uses the direct method to prepare the operating section of thestatement.

ACCT: 2100 Spring 2016 Appendix E Take Home Quiz Catsclaw Enterprises, Inc. purchases debt securities to hold to maturity and equity securities are classified as available for sale. At 1/1/15 Catsclaw held Woodwork's bonds with a face value of $300,000. The bonds were purchased on March 31, 2014 with a 3.75% coupon rate. The effective rate of interest is 4%. Interest is payable on March 31 and September 30. The bonds mature on March 31, 2024. The following transactions relate to Catsclaw's investment activity during 2015. 2015 February 5 March 20 Purchased 5,000 Harold, Inc. common shares for $45,000. Purchased 300 shares of $200 par value, 6.5% preferred shares in ATC Corporation for $75,000. March 31 Received the interest payment on the Woodwork bonds. August 1 Received the annual cash dividend on the ATC preferred shares. September 30 Received the interest payment on the Woodwork bonds. October 5 Sold the Harold, Inc. common shares at $7 per share. November 8 Purchased 3,500 shares of Mayflag & Co. for $52,500. December 31 Market prices of the investment securities follow: Woodwork 103 ATC $257 Mayflag & Co. $12 Required: a. Prepare the appropriate journal entry for each transaction or event. b. Prepare the necessary adjusting journal entries at December 31, 2015. c. Show the amounts that would be reported on the company's December 31, 2014 and 2015 balance sheet related to the investments. Comparable amounts should be displayed as they would be on a multiyear balance sheet. Be sure to include the appropriate section headings. You may ignore income tax effects. d. Show the amounts that would be reported on the company's 2015 statements of cash flow related to the investment activity. Be sure to include the appropriate section headings. Assume that Catsclaw uses the direct method to prepare the operating section of the statement