Problem $7\mathrm{.}5$A $($Static$)$ Accounting for Marketable Securities $($L$07-1,$L$07-4)$

At December $31,$ year $1,$ Charter Holding Company purchased the following marketable securities in the capital stock of two publicly

traded companies. These transactions were parts of the company's year$-$end transactions intended to temporarily invest excess cash

that will be needed several months later during Charter Holding's busiest season of the year.

In year $2,$ Charter engaged in the following two transactions:

At December $31,$ year $2,$ the market values of these stocks were Bolten Company, $$67$ per share; and Ganders, Incorporated, $$37$ per

share.

Required:

a$-1.$ Calculate the amount of marketable securities reported in the asset section of Charter's financial statements at December $31,$ year

a$-2.$ Calculate the amount of unrealized gain or loss reported in the stockholders' equity section of Charter's financial statements at

December $31,$ year $1.$

b$.$ Prepare journal entries to record the transactions on April $10$ and August $7.$

c$-1.$ Prior to making a market value adjustment at the end of year $2,$ determine the unadjusted balance in the Marketable Securities

control account.

d$.$ Prepare a schedule showing the cost and the market values of securities owned at the end of year $2.$

e$.$ Prepare the market value adjusting entry required at December $31,$ year $2.$

$f-1.$ Calculate the amount of marketable securities in the financial statements at December $31,$ year $2.$

g$.$ Illustrate the presentation of the net realized gains $($or losses$)$ in the year $2$ income statement. Assume a multiple$-$step income

statement and show the caption identifvina the section in which this amount would appear.