Question

Stoll Co.’ s long- term available- for- sale portfolio at December 31, 2012, consists of the following.


Stoll enters into the following long-term investment transactions during year 2013.
Jan. 29 Sold 3,500 shares of Company B common stock for $ 79,188 less a brokerage fee of $ 1,500.
Apr. 17 Purchased 10,000 shares of Company W common stock for $ 197,500 plus a brokerage fee of $ 2,400. The shares represent a 30% ownership in Company W.
July 6 Purchased 4,500 shares of Company X common stock for $ 126,562 plus a brokerage fee of $ 1,750. The shares represent a 10% ownership in Company X.
Aug. 22 Purchased 50,000 shares of Company Y common stock for $ 375,000 plus a brokerage fee of $ 1,200. The shares represent a 51% ownership in Company Y.
Nov. 13 Purchased 8,500 shares of Company Z common stock for $ 267,900 plus a brokerage fee of $ 2,450. The shares represent a 5% ownership in Company Z.
Dec. 9 Sold 40,000 shares of Company A common stock for $ 515,000 less a brokerage fee of $ 4,100.
The fair values of its investments at December 31, 2013, are: B, $ 81,375; C, $ 610,312; W, $ 191,250; X, $ 118,125; Y, $ 531,250; and Z, $ 278,800.

Required
1. Determine the amount Stoll should report on its December 31, 2013, balance sheet for its long- term investments in available- for- sale securities.
2. Prepare any necessary December 31, 2013, adjusting entry to record the fair value adjustment for the long- term investments in available-for-sale securities.
3. What amount of gains or losses on transactions relating to long- term investments in available-for-sale securities should Stoll report on its December 31, 2013, incomestatement?


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  • CreatedNovember 26, 2013
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