Question

Here is Kline Company’s portfolio of long-term available-for-sale securities at
December 31, 2013:
Cost
1,400 shares of Tabares Inc. common stock......... $73,500
1,200 shares of Munoz Corporation common stock........84,000
800 shares of H. Hogan Corporation preferred stock.....33,600
On December 31, the total cost of the portfolio equaled the total fair value. Kline had the following transactions related to the securities during 2014.
Jan. 20 Sold 1,400 shares of Tabares Inc. common stock at $55 per share.
28 Purchased 400 shares of $10 par value common stock of M. Powell Corporation at $78 per share.
30 Received a cash dividend of $1.25 per share on Munoz Corporation common stock.
Feb.8 Received cash dividends of $0.40 per share on H. Hogan Corporation preferred stock.
18 Sold all 800 shares of H. Hogan preferred stock at $35 per share.
July 30 Received a cash dividend of $1.10 per share on Munoz Corporation common stock.
Sept. 6 Purchased an additional 600 shares of the $10 par value common stock of
M. Powell Corporation at $82 per share.
Dec. 1 Received a cash dividend of $1.50 per share on M. Powell Corporation
common stock.
At December 31, 2014, the fair values of the securities were:
Munoz Corporation common stock..........$65 per share
M. Powell Corporation common stock..........$77 per share
Kline uses separate account titles for each investment, such as Investment in Munoz Corporation Common Stock.
Instructions
(a) Prepare journal entries to record the transactions.
(b) Post to the investment accounts. (Use separate T-accounts for each investment.)
(c) Prepare the adjusting entry at December 31, 2014, to report the portfolio at fair value.
(d) Show the balance sheet presentation at December 31, 2014.


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  • CreatedApril 07, 2014
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