During 2014, its first year of operations, Myron Company purchased two available-for-sale investments as follows:
Security Shares Purchased Cost Olson Products, Inc. 660 $25,608 Reynolds Co. 1,790 36,158
Assume that as of December 31, 2014, the Olson Products, Inc., stock had a market value of $46 per share and the Reynolds Co. stock had a market value of $36 per share. Myron Company had net income of $198,300, and paid no dividends for the year ending December 31, 2014. All of the available-for-sale investments are classified as current assets.
a. Prepare the Current Assets section of the balance sheet presentation for the available-for-sale investments.
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| Balance Sheet (selected Current Asset items) | |
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| Available-for-Sale Investments, at Cost Available-for-Sale Investments, at Fair Value Common Stock Retained Earnings Unrealized Gain (Loss) on Available-for-Sale Investments Correct 6 of Item 1 | | | | | |
| Less Retained Earnings Less Unrealized Gain (Loss) on Available-for-Sale Investments Less Valuation Allowance for Available-for-Sale Investments Plus Retained Earnings Plus Unrealized Gain (Loss) on Available-for-Sale Investments Plus Valuation Allowance for Available-for-Sale Investments Correct 8 of Item 1 | | | | | |
b. Prepare the Stockholders' Equity section of the balance sheet to reflect the earnings and unrealized gain (loss) for the available-for-sale investments.
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| Balance Sheet (selected Stockholders' Equity items) | |
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| Available-for-Sale Investments, at Cost Available-for-Sale Investments, at Fair Value Common Stock Valuation Allowance for Available-for-Sale Investments Retained Earnings Correct 5 of Item 2 | | | |
| Available-for-Sale Investments, at Cost Available-for-Sale Investments, at Fair Value Common Stock Valuation Allowance for Available-for-Sale Investments Unrealized Gain (Loss) on Available-for-Sale Investments Correct 7 of Item 2 | | | |
