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On November 1 of Year 1, Drucker Co. acquired the following investments in equity securities measured at FV-NI. Kelly Corporation 1,250 shares of common stack
On November 1 of Year 1, Drucker Co. acquired the following investments in equity securities measured at FV-NI. Kelly Corporation 1,250 shares of common stack (ne par) at $60 per share Kecte Corporation 750 shares preferred stock (510 por) 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 250 shares of Keefe Corporation preferred stock at $25 per share. Dec. 31: Fair values: Kelly common, $45 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. Dr. v 1.525 Cr. 0 1,625 0 V Date Account Name Mar. 2. Year 2 Cash Dividend Revenue To record dividends received Oct. 1, Year 2 Cash Gain on Sale of Investment Investment in Stock To record sale of investment Dec 31, Year 2 Unrealized Gain or Loss-Income Fair Value Adjustment Equity Securities To adjust the FVA account 6,250 D av 1.250 5,000 0 6.500 0 OX 5,500 X e. Indicate items and amounts that should be reported on the Year 2 income statement and year-end balance sheet. Note: Use a negative sign to indicate a loss. Year 2 Income Statement Other Revenues and Gains Dividend revenue Net gain (loss) on equity securities Balance Sheet, Dec. 31, Year 2 Assets 1.625 16,250) Istorm Acudier HIVIO
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