Question
Equity and Available-for-Sale Investments OBrien Industries Inc. is a book publisher. The available-for-sale investments at cost and fair value on December 31, 20Y4, are as
Equity and Available-for-Sale Investments
OBrien Industries Inc. is a book publisher.
The available-for-sale investments at cost and fair value on December 31, 20Y4, are as follows:
| Issuing Company | Cost | Fair Value |
| Bernard Co. | $36,000 | $32,800 |
| Chadwick Co. | 40,000 | 37,400 |
| $76,000 | $70,200 |
The investment in Jolly Roger Co. stock represents 32% of the outstanding shares of Jolly Roger Co.
The following selected transactions occurred during 20Y5:
| Jan. 2. | Purchased $78,400 of Gozar Inc. 5%, 10-year bonds at 100. The bonds are classified as an available-for-sale investment. The bonds pay interest on June 30 and December 31. | |
| June 30. | Received interest for 6 months on the Gozar Inc. bonds purchased on January 2. | |
| Oct. 1. | Purchased $45,000 of Nightline Co. 5%, 10-year bonds at 100. The bonds are classified as an available-for-sale investment. The bonds pay interest on October 1 and April 1. | |
| 9. | Dividends of $12,600 are received on the Jolly Roger Co. investment. | |
| Dec. 31. | Jolly Roger Co. reported a total net income of $113,000 for 20Y5, which OBrien Industries Inc. recorded using the equity method. | |
| 31. | Received interest for 6 months on the Gozar Inc. bonds purchased on January 2. | |
| 31. | Accrued 3 months of interest on the Nightline bonds. | |
| 31. | Adjusted the available-for-sale investment portfolio to fair value, using the following fair values: |
| Issuing Company | Fair Value |
| Bernard Co. | $33,600 |
| Chadwick Co. | 35,000 |
| Gozar Inc. | 81,200 |
| Nightline Co. | 44,100 |
For the year ending December 31, 20Y5, OBrien Industries Inc. reported net income of $148,600 and paid no dividends.
Required:
The comparative unclassified balance sheets for December 31, 20Y4 and 20Y5 are provided below. Selected balances are missing. Determine the missing amounts. Use minus sign to indicate the negative amounts. Do not round interim calculations. Round final answers to nearest dollar.
| OBrien Industries Inc. | ||
| Partial Balance Sheets | ||
| December 31 | ||
| 20Y5 | 20Y4 | |
| Available-for-Sale Investments (at Cost) | $fill in the blank 1 | $76,000 |
| Valuation Allowance for Available-for-Sale Investments | fill in the blank 2 | (5,800) |
| Available-for-Sale Investments (Fair Value) | $fill in the blank 3 | $70,200 |
| Interest Receivable | $fill in the blank 4 | |
| Investment in Jolly Roger Co. Stock | fill in the blank 5 | $77,000 |
| Office Equipment (Net) | 128,000 | 134,700 |
| Total Assets | $fill in the blank 6 | $641,600 |
| Accounts Payable | $81,900 | $73,800 |
| Common Stock | 70,600 | 70,600 |
| Excess of Issue Price Over Par | 224,600 | 224,600 |
| Retained Earnings | fill in the blank 7 | 278,400 |
| Unrealized Gain (Loss) on Available-for-Sale Investments | fill in the blank 8 | (5,800) |
| Total Liabilities and Stockholders' Equity | $fill in the blank 9 | $641,600 |
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Accounting Principles
Authors: Jerry J Weygandt, Donald E Kieso, Paul D Kimmel
8th Edition
0471980196, 9780471980193
