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On Oct. 1 , 2 0 2 1 , the beginning of the 4 th quarter, Sooner Co . held $ 6 0 million of
On Oct. the beginning of the th quarter, Sooner Co held $ million of bonds of Castor Corp., purchased on May at face value and held
as trading securities The company's fiscal year ends on December
Listed below are transactions during the fourth quarter of relating to the company's investments.
Date
Oct. Purchased million shares of Melton Corp. common stock for $ million. The purchase does not give Sooner significant influence as Melton
has a total of million shares issued.
Oct. Received semiannual interest of $ million from the Castor Corp. bonds.
Nov. Purchased bonds of Hughes Corp. at their $ million face value, to be held until they mature in Semiannual interest is payable April
and October
Nov. Sold the Castor Corp. bonds for $ million. No unrealized gains and losses had been recorded on these bonds previously.
Dec. Purchased bonds of Phillips Corp. at their $ million face value as availableforsale securities The bonds mature in Semiannual
interest is payable May and November
Dec. Purchased US Treasury bonds for $ million as trading securities hoping to earn profits on shortterm differences in prices.
Dec. Purchased million shares of Nelson Corp.s million shares of common stock for $ million, planning to hold these shares indefinitely.
Dec. Sold the Treasury bonds for $ million.
Dec. Received cash dividends of $ million from the Melton Corp. shares of common stock.
Additionally, on December the company recorded any necessary adjusting entries relating to changes in fair values of the investments. Specifically,
as of December :
The fair value of the Hughes Corp. bond investment was $ million
The fair value of the Phillips Corp. bond investment was $ million
The market price of the Melton Corp. common stock was $ per share
The market price of the Nelson Corp. common stock was $ per share Required:
Review the list of transactions above. Then, select the appropriate classification and accounting treatment for each investment listed in the table below.
Record each transaction or yearend adjusting entry, using "Investment in bonds" or Investment in equity securities as the name of the investment
accounts. If no entry is required for a transactionevent select No journal entry required" in the first account field. Do not round intermediate
calculations. Enter answers in millions rounded to decimal place, ie should be entered as Entries are adjusting entries,
if necessary, recorded on Dec.
Determine the amounts reported on Sooner's financial statements: a BALANCE SHEET: the amounts reported as assets on the balance sheet for
investments in equity securities and Fair Value Adjustment for all equity securiites and investments in debt securities and Fair Value Adjustment for all
debt securities and b INCOME STATEMENT; the amounts related to investments show all gainslosses realized and unrealized, as a single amount
called "Net gain or loss on investments. Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions
rounded to decimal place, ie should be entered as Make Journal Entries... a balance sheet..... and an income statement
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