Wilbur Company often invests in the debt and equity securities of other companies as short-term investments. During

Question:

Wilbur Company often invests in the debt and equity securities of other companies as short-term investments. During 2012, the following events occurred:

July 1 Wilbur purchased the securities listed here:

Classification Trading Trading Trading Available-for-sale Type Security Cost S41,200 23,940 51,250 21,300 Debt 2 Equity

Sept. 30 Wilbur received a cash dividend of $2,460 on Security 2.
Dec. 1 Wilbur sold Security 4 for $18,300.
31 Wilbur received interest of $4,300 on Security 1.
31 The market prices were quoted as follows: Security 1, $40,900; Security 2, $25,550; Security 3, $44,000.
Required:
1. Prepare journal entries to record the events.
2. Illustrate how these investments would be reported on the balance sheet at December 31.
3. What items and amounts would be reported on the income statement for theyear?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...