p17-9 b

Project Description:

p17-9 (financial statement presentation of available-for-sale investments) kennedy company has
the following portfolio of available-for-sale securities at december 31, 2010.
percent per share
security quantity interest cost market
frank, inc. 2,000 shares 8% $11 $16
ellis corp. 5,000 shares 14% 23 19
mendota company 4,000 shares 2% 31 24
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2760t_c17_856-929.qxd 11/18/08 2:57 pm page 920
problems · 921
instructions
(a) what should be reported on kennedy’s december 31, 2010, balance sheet relative to these longterm
available-for-sale securities?
on december 31, 2011, kennedy’s portfolio of available-for-sale securities consisted of the following
common stocks.
per share
percent
security quantity interest cost market
ellis corp. 5,000 shares 14% $23 $28
mendota company 4,000 shares 2% 31 23
mendota company 2,000 shares 1% 25 23
at the end of year 2011, kennedy company changed its intent relative to its investment in frank, inc.
and reclassified the shares to trading securities status when the shares were selling for $8 per share.
(b) what should be reported on the face of kennedy’s december 31, 2011, balance sheet relative to
available-for-sale securities investments? what should be reported to reflect the transactions above
in kennedy’s 2011 income statement?
(c) assuming that comparative financial statements for 2010 and 2011 are presented, draft the footnote
necessary for full disclosure of kennedy’s transactions and position in equity securities. ( (i only need the answer to part b)
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Price Type: Negotiable

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