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Achievement Test 6 AT6-5 PART III INVESTMENT VALUATION (6 points) At December 31, 2015, RMS Corporation has the following securities: Securities Cost Fair Value Trading
Achievement Test 6 AT6-5 PART III INVESTMENT VALUATION (6 points) At December 31, 2015, RMS Corporation has the following securities: Securities Cost Fair Value Trading $108,000 $102,000 Available-for-Sale $145,000 $162,000 Prepare the necessary adjusting entries to report the securities at fair value. AT6-6 Test Bank for Financial Accounting, Tenth Edition PART V TREASURY STOCK TRANSACTIONS (14 points) Sophia Corporation has the following stockholders' equity accounts on January 1, 2015: Common Stock, $10 par value $1,500,000 Paid-in Capital in Excess of Par. 200,000 Retained Earnings........ 500,000 Total Stockholders' Equity. $2,200,000 The company uses the cost method to account for treasury stock transactions. During 2015, the following treasury stock transactions occurred: April 1 Purchased 15,000 shares at $15 per share. August 1 Sold 5,000 shares at $18 per share. October 1 Sold 6,000 shares at $12 per share. Instructions Journalize the treasury stock transactions for 2015. Dec. 31, 2016 A comparative balance sheet for Isabella Company appears below: ISABELLA COMPANY Comparative Balance Sheet Dec. 31, 2017 Assets Cash $ 34.000 Accounts receivable 18,000 Inventory 25,000 Prepaid expenses 6,000 Long-term investments -0- Equipment 60,000 Accumulated depreciationequipment, (20,000) Total assets $123.000 $11,000 13,000 17,000 9,000 17,000 33,000 (15,000) $85.000 Liabilities and Stockholders' Equity Accounts payable $ 17.000 Bonds payable 36,000 Common stock 40,000 Retained earnings 30,000 Total liabilities and stockholders' equity $123.000 $ 7,000 45,000 23,000 10.000 $85.000 Additional information: 1. Net income for the year ending December 31, 2017 was $35,000. 2. Cash dividends of $15,000 were declared and paid during the year. 3. Long-term investments that had a cost of $17,000 were sold for $14,000. 4. Sales for 2017 were $120,000. Instructions Prepare a statement of cash flows for the year ended December 31, 2017, using the indirect method
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