Here is Frederick Company's portfolio of long-term stock investments at December 31, 2021, the end of its
Question:
Here is Frederick Company's portfolio of long-term stock investments at December 31, 2021, the end of its first year of operations.
On December 31, the total cost of the portfolio equaled the total fair value. Frederick had the following transactions related to the securities during 2022.
At December 31, 2022, the fair values of the securities were:
a. Prepare journal entries to record the transactions.
b. Post to the investment account. (Use a T-account.)c. Prepare the adjusting entry at December 31, 2022 to report the portfolio at fair value.
d. Show the balance sheet presentation at December 31, 2022, for the investment-related accounts.
1,000 shares of Willhite Corporation common stock 1,400 shares of Hutcherson Corporation common stock 1,200 shares of Downing Corporation preferred stock Cost $52,000 84,000 33,600
Step by Step Answer:
Answer Journal entries Date Account titles and explanation Debit Credit Stock investments 20Jan Cash ...View the full answer
Accounting Principles
ISBN: 9781119707110
14th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Jill E. Mitchell
Related Video
Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
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