Question

Castleman Holdings, Inc. had the following investment portfolio at January 1, 2010.


During 2010, the following transactions took place.
1. On March 1, Rogers Company paid a £2 per share dividend.
2. On April 30, Castleman Holdings, Inc. sold 300 shares of Chance Company for £11 per share.
3. On May 15, Castleman Holdings, Inc. purchased 100 more shares of Evers Co. at £16 per share.
4. At December 31, 2010, the shares had the following price per share values: Evers £17, Rogers £19, and Chance £8.
During 2011, the following transactions took place.
5. On February 1, Castleman Holdings, Inc. sold the remaining Chance shares for £8 per share.
6. On March 1, Rogers Company paid a £2 per share dividend.
7. On December 21, Evers Company declared a cash dividend of £3 per share to be paid in the next month.
8. At December 31, 2011, the shares had the following price per shares values: Evers £19 and Rogers £21.

Instructions
(a) Prepare journal entries for each of the above transactions.
(b) Prepare a partial statement of financial position showing the Investments account at December 31, 2010 and 2011.
(c) Briefly describe how the accounting would change if the Evers investment was classified astrading.


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  • CreatedJune 17, 2013
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