Prepare schedules showing the individual components and final balances for the following:
(be sure to clearly present and label all supporting computations):
a- Interest Receivable on 12/31/x1.
b-The balance sheet presentation of each securities portfolio on 12/31/x1.
-
Trading securities portfolio
-
Availableforsale securities portfolio
3. Heldtomaturity securities portfolio
c-Interest Revenue for the year ended 12/31/x1.
d-Interest Expense for the year ended 12/31/x1.
Garrison Property Development, Inc. Post-closing Trial Balance December 31, 20x1 85,730 830 11,420 24,000 204,750 13,050 94,000 6,696 379 5,760 1,672 Trading Securities (Debt and Equity Investments) Fair Value Adjustment (Trading) Interest Receivable Notes Receivable "1" Available-for-Sale Securities (Debt and Equity Investments) Fair Value Adjustment (Available-for-Sale) Held-to-Maturity Securities (Debt Investments) Office Furniture Accumulated depreciation - office furniture Computers Accumulated depreciation - computers Light duty equipment Accumulated depreciation - light duty equipment Heavy duty equipment Accumulated depreciation - heavy duty equipment Patent Goodwill Bond Issue Costs (Bond Payable "A") Notes payable "A" Discount on notes payable "A" Bonds Payable "A" (maturity date: October 1, 20x6) Premium on Bonds Payable "A" 150,000 31,875 500,000 93,750 56,250 100,000 3,420 4,800 206 300,000 1,995 Additional information regarding items on the 12/31/x1 post-closing trial balance: 2) A note receivable (note receivable "1") was received on November 1, 20x1 from a customer, as follows: Principal amount: $ 24,000 Stated (annual) interest rate: 8% Term of note (months): 6 The stated interest rate on the note was considered appropriate for this type of note. 3) The available-for-sale securities portfolio consists of the following securities at 12/31/x1: Date of purchase |3/1/X1 Security Rodgers Company bonds amount purchased $ 120,000 $ face value 600 shares $ 1,000 shares $ cost at date of purchase 117,000 plus accrued interest 45 /share 60 /share 11/11/x1 11/26/x1 Disney Company stock Berlin Company stock 10% Note: The Rodgers Company bonds mature on 7/01/x4. The stated interest rate is: Interest is paid semi-annually on January 1 and July 1. Fair value information for the available-for-sale securities portfolio as of 12/31/x1: Fair value Security Rodgers Company bonds Disney Company stock Berlin Company stock $ $ 98% of par 42 /share 75 /share 4) The held-to-maturity securities portfolio consists of the following securities at 12/31/x1: Date of amount purchase 5/1/x1 Security Hammerstein Company bonds purchased $ 90,000 $ face value cost at date of purchase 94,400 plus accrued interest 8% Note: The Hammerstein Company bonds mature on 9/1/x8. The stated interest rate is: Interest is paid semi-annually on March 1 and September 1. 5) Office furniture was acquired on January 1, 20x1. Terms of purchase were as follows: Number of semi-annual payments 6 Amount of each semi-annual payment $ 1,200 Effective annual interest rate 6% Date of first payment 1/1/x1 [The note payable described above is referred to as Note Payable "A". The effective interest method of amortization is used for this note.] 15 The life of the office furniture is estimated to be (number of years): The residual value (as a percentage of original cost) is estimated at: 15% 6) Computers were purchased on February 1, 20x1 for cash: $ 5,760 3 The life of the computers is estimated to be (number of years): The residual value (as a percentage of original cost) is estimated at: 5% 7) The was purchased on April 1, 20x1. The entry made Camden Equipment Company at the time of the acquisition was as follows: Accounts receivable Light duty equipment Heavy duty equipment Patents Goodwill Accounts payable Cash 40,000 150,000 500,000 60,000 100,000 75,000 775,000 [NOTE: All estimated lives begin as of April 1, 20x1.] 3 a) The estimated life (# of years) of the light duty equipment is: The residual value (as a percentage of original cost) is estimated at: The straight-line method of depreciation is used for these assets. 15% b) The estimated life (# of years) of the heavy duty equipment is: 8 The residual value (as a percentage of original cost) is estimated at: 10% The double-declining balance method of depreciaton is used for these assets. Garrison Property Development, Inc. Post-closing Trial Balance December 31, 20x1 85,730 830 11,420 24,000 204,750 13,050 94,000 6,696 379 5,760 1,672 Trading Securities (Debt and Equity Investments) Fair Value Adjustment (Trading) Interest Receivable Notes Receivable "1" Available-for-Sale Securities (Debt and Equity Investments) Fair Value Adjustment (Available-for-Sale) Held-to-Maturity Securities (Debt Investments) Office Furniture Accumulated depreciation - office furniture Computers Accumulated depreciation - computers Light duty equipment Accumulated depreciation - light duty equipment Heavy duty equipment Accumulated depreciation - heavy duty equipment Patent Goodwill Bond Issue Costs (Bond Payable "A") Notes payable "A" Discount on notes payable "A" Bonds Payable "A" (maturity date: October 1, 20x6) Premium on Bonds Payable "A" 150,000 31,875 500,000 93,750 56,250 100,000 3,420 4,800 206 300,000 1,995 Additional information regarding items on the 12/31/x1 post-closing trial balance: 2) A note receivable (note receivable "1") was received on November 1, 20x1 from a customer, as follows: Principal amount: $ 24,000 Stated (annual) interest rate: 8% Term of note (months): 6 The stated interest rate on the note was considered appropriate for this type of note. 3) The available-for-sale securities portfolio consists of the following securities at 12/31/x1: Date of purchase |3/1/X1 Security Rodgers Company bonds amount purchased $ 120,000 $ face value 600 shares $ 1,000 shares $ cost at date of purchase 117,000 plus accrued interest 45 /share 60 /share 11/11/x1 11/26/x1 Disney Company stock Berlin Company stock 10% Note: The Rodgers Company bonds mature on 7/01/x4. The stated interest rate is: Interest is paid semi-annually on January 1 and July 1. Fair value information for the available-for-sale securities portfolio as of 12/31/x1: Fair value Security Rodgers Company bonds Disney Company stock Berlin Company stock $ $ 98% of par 42 /share 75 /share 4) The held-to-maturity securities portfolio consists of the following securities at 12/31/x1: Date of amount purchase 5/1/x1 Security Hammerstein Company bonds purchased $ 90,000 $ face value cost at date of purchase 94,400 plus accrued interest 8% Note: The Hammerstein Company bonds mature on 9/1/x8. The stated interest rate is: Interest is paid semi-annually on March 1 and September 1. 5) Office furniture was acquired on January 1, 20x1. Terms of purchase were as follows: Number of semi-annual payments 6 Amount of each semi-annual payment $ 1,200 Effective annual interest rate 6% Date of first payment 1/1/x1 [The note payable described above is referred to as Note Payable "A". The effective interest method of amortization is used for this note.] 15 The life of the office furniture is estimated to be (number of years): The residual value (as a percentage of original cost) is estimated at: 15% 6) Computers were purchased on February 1, 20x1 for cash: $ 5,760 3 The life of the computers is estimated to be (number of years): The residual value (as a percentage of original cost) is estimated at: 5% 7) The was purchased on April 1, 20x1. The entry made Camden Equipment Company at the time of the acquisition was as follows: Accounts receivable Light duty equipment Heavy duty equipment Patents Goodwill Accounts payable Cash 40,000 150,000 500,000 60,000 100,000 75,000 775,000 [NOTE: All estimated lives begin as of April 1, 20x1.] 3 a) The estimated life (# of years) of the light duty equipment is: The residual value (as a percentage of original cost) is estimated at: The straight-line method of depreciation is used for these assets. 15% b) The estimated life (# of years) of the heavy duty equipment is: 8 The residual value (as a percentage of original cost) is estimated at: 10% The double-declining balance method of depreciaton is used for these assets
