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Can I get some help on this question? On November 1 of Year 1, Drucker Co. acquired the following investments in equity securities measured at
Can I get some help on this question?
On November 1 of Year 1, Drucker Co. acquired the following investments in equity securities measured at FV-NI. Kelly Corporation 1,000 shares of common stock (no-par) at $60 per share Keefe Corporation 600 shares preferred stock ($10 par) at $20 per share On December 31, the company's year-end, the quoted market prices were as follows: Kelly Corporation common stock, $52, and Keefe Corporation preferred stock, $24. Following are the data for the following year (Year 2). Mar. 02: Dividends per share, declared and paid: Kelly Corp., $1, and Keefe Corp., $0.50. Oct. 01: Sold 200 shares of Keefe Corporation preferred stock at $25 per share. Dec. 31: Fair values: Kelly common, $46 per share, Keefe preferred, $26 per share. Year 1 Year 2 a. Prepare the entry for Drucker Company to record the purchase of the securities. b. Prepare any adjusting entry needed at December 31, Year 1. Note: If a journal entry isn't required for the transaction, select "N/A-Debit" and "N/A-Credit" as the account names and leave the Dr. and Cr, answers blank (zero). Date Account Name Debit Credit Nov. 1, Year 1 # 0 0x Cash Dividend Revenue + 0 0x To record purchase of securities. Dec. 31, Year 1 # 0 0x # 0 0x To record adjusting entry. c. Indicate the items and amounts that should be reported on the Year 1 income statement of Drucker and its year-end balance sheet. Assume that the investments are classified as current. Note: Use a negative sign to indicate a loss. On November 1 of Year 1, Drucker Co. acquired the following investments in equity securities measured at FV-NI. Kelly Corporation 1,000 shares of common stock (no-par) at $60 per share Keefe Corporation 600 shares preferred stock ($10 par) at $20 per share On December 31, the company's year-end, the quoted market prices were as follows: Kelly Corporation common stock, $52, and Keefe Corporation preferred stock, $24. Following are the data for the following year (Year 2). Mar. 02: Dividends per share, declared and paid: Kelly Corp., $1, and Keefe Corp., $0.50. Oct. 01: Sold 200 shares of Keefe Corporation preferred stock at $25 per share. Dec. 31: Fair values: Kelly common, $46 per share, Keefe preferred, $26 per share. Year 1 Year 2 d. Prepare the entries required in Year 2 to record dividend revenue, the sale of stock, and the fair value adjustment. Assume that the Fair Value Adjustment account needs to be adjusted for the investment portfolio on December 31, Year 2. Date Account Name Dr. Cr. Mar. 2, Year 2 Cash 1300 ; + 0 1300 Dividend Revenue 0 To record dividends received. Cash Oct. 1, Year 2 # 5000 0 # 0 1000 Gain on Sale of Investment Investment in Stock # 0 4000 To record sale of investment. Dec. 31, Year 2 Unrealized Gain or Loss-Income 0 0x Fair Value djustm + 0 0x To adjust the FVA account. e. Indicate items and amounts that should be reported on the Year 2 income statement and year-end balance sheetStep by Step Solution
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