Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Amaigamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells

image text in transcribed
Amaigamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities. The following selected transactions relate to Amaigamated's investment activities during the last quarter of 2024 and the first month of 2025. The only securities held by Amalgamated at October 1, 2024 were $40million of 10% bonds of Kansas Abstractors, Incorporated purchased on May 1, 2024 at face value and held In Amalgamated's trading securities portfolio. The company's fiscal year ends on December 31 . October 18, 2024 Purchased 2 million shares of Milwork Ventures Company comuon stock for \$63 million. Millwork has a total of 62 million wharea insued. Ootober 31, 2024 Received memiannal interest of $2,4 million from the Kansas abatractora bonds. November 1, 2024 Purehased 10b bonds of Holistie Entertainment Enterpriaes at their $18 million face value, to be held until they mature in 2034. Semiannual interest il payable Apri1 30 and ootober 31. Wovember 1,2024 Sold the Kansas Abstractors bonds for $37 million because rising interest rates are expected to cause their tair value to continue to fall. No unrealized gainis and losses had been recorded on these bonds previounly. December 1, 2024 Parehased 121 bonds of Household plasties Corporation at their $60 nillion face value, to be held until they mature in 2034 . Semiannual interest is payable May 31 and November 10. December 20, 2024 Furehased U. S. Treasury bonds for $7,2 million as trading securities, hoping to earn profita on whort-term differences in prices. December 23,2024 Sold the Treasury bonds for $7.5million. Deceaber 29,2024 received canh dividends of $9 million from the Millwork ventures company. nhares of cormon atock. December 31, 2024 Recorded any necessary adjusting entries relating to the investments. The market price of the Millwork ventures Cospany comnon stock was $27.00 per share and $14.00 per nhare for the sks Corporation common stock. The fair values of the bond inventments were $58.9million for fousehold plastich Corporation and $16.5 mil11on for Holistio Entertainnent Enterprises. January 7,2025 Sold the wxs Corporation common stock abarea for $47 mill1ion. Required: Prepare the appropriate journal entry for each transaction or event. Use one summary entry on December 31 to adjust the portfolio of equity investments to fair value

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Workbook/Study Guide To Accompany Managerial Accounting

Authors: Ray H Garrison, Eric Noreen, Peter C. Brewer

11th Edition

0072986131, 978-0072986136

More Books

Students also viewed these Accounting questions

Question

1.what is the significance of Taxonomy ?

Answered: 1 week ago

Question

What are the advantages and disadvantages of leasing ?

Answered: 1 week ago

Question

Name is needed for identifying organisms ?

Answered: 1 week ago