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Ivanhoe, Inc. had the following equity investment portfolio at January 1, 2020. Evers Company 960 shares @ $14 each $13,440 Rogers Company 880 shares @
Ivanhoe, Inc. had the following equity investment portfolio at January 1, 2020.
Evers Company | 960 shares @ $14 each | $13,440 | |||
Rogers Company | 880 shares @ $20 each | 17,600 | |||
Chance Company | 520 shares @ $10 each | 5,200 | |||
Equity investments @ cost | 36,240 | ||||
Fair value adjustment | (7,300 | ) | |||
Equity investments @ fair value | $28,940 |
During 2020, the following transactions took place.
1. | On March 1, Rogers Company paid a $2 per share dividend. | |
2. | On April 30, Ivanhoe, Inc. sold 320 shares of Chance Company for $11 per share. | |
3. | On May 15, Ivanhoe, Inc. purchased 100 more shares of Evers Company stock at $17 per share. | |
4. | At December 31, 2020, the stocks had the following price per share values: Evers $18, Rogers $19, and Chance $9. |
During 2021, the following transactions took place.
5. | On February 1, Ivanhoe, Inc. sold the remaining Chance shares for $9 per share. | |
6. | On March 1, Rogers Company paid a $2 per share dividend. | |
7. | On December 21, Evers Company declared a cash dividend of $3 per share to be paid in the next month. | |
8. | At December 31, 2021, the stocks had the following price per share values: Evers $20 and Rogers $21. |
Prepare a partial balance sheet showing the investment-related amounts to be reported at December 31, 2020 and 2021.
Note: The correct answer for Fair Value = 4080
(1) Cash 1760 Dividend Revenue 1760 (2) Cash 3520 Gain on Sale of Investments 320 Equity Investments 3200 (3) Equity Investments 1700 Cash 1700 4) Fair Value Adjustment 10160 Unrealized Holding Gain or Loss -Income 10160 (5) Cash 1800 Loss on Sale of Investments 200 Equity Investments 2000 (6) Cash 1760 Dividend Revenue 1760 (7) Dividend Receivable 3180 Dividend Revenue 3180 (8) Fair Value Adjustment 4200 Unrealized Holding Gain or Loss -Income 4200Step by Step Solution
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