Here is Kalvin Companys portfolio of long-term stock investments at December 31, 2021, the end of its

Question:

Here is Kalvin Company’s portfolio of long-term stock investments at December 31, 2021, the end of its first year of operations.
Cost
1,400 shares of Batone Inc. common stock $73,500
1,200 shares of Mendez Corporation common stock 84,000
800 shares of P. Tillman Corporation preferred stock 33,600
On December 31, the total cost of the portfolio equaled the total fair value. Kalvin had the following transactions related to the securities during 2022.
Jan. 20 Sold all 1,400 shares of Batone Inc. common stock at $55 per share.
28 Purchased 400 shares of $10 par value common stock of P. Wahl Corporation at $78 per share.
30 Received a cash dividend of $1.25 per share on Mendez Corporation common stock.
Feb. 8 Received cash dividends of $0.40 per share on P. Tillman Corporation preferred stock.
18 Sold all 800 shares of P. Tillman preferred stock at $35 per share.
July 30 Received a cash dividend of $1.10 per share on Mendez Corporation common stock.
Sept. 6 Purchased an additional 600 shares of the $10 par value common stock of P. Wahl Corporation at $82 per share.
Dec. 1 Received a cash dividend of $1.50 per share on P. Wahl Corporation common stock.
At December 31, 2022, the fair values of the securities were:
Mendez Corporation common stock $65 per share
P. Wahl Corporation common stock $77 per share
Kalvin uses separate account titles for each investment, such as Investment in Mendez Corporation Common Stock.


Instructions
a. Prepare journal entries to record the transactions.
b. Prepare the adjusting entry at December 31, 2022, to report the portfolio at fair value.
c. Show the balance sheet presentation at December 31, 2022.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
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Accounting Tools For Business Decision Making

ISBN: 9781119571056

7th Edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

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