Question

The following are in Rodriguez’s Company’s portfolio of long-term available-for-sale securities at December 31, 2014.
Cost
700 shares of Parra Corporation common stock ....... $35,000
900 shares of Robison Corporation common stock...... 42,000
800 shares of Vega Corporation preferred stock ....... 22,400
On December 31, the total cost of the portfolio equaled total fair value. Rodriguez’s Company had the following transactions related to the securities during 2015.
Jan. 7 Sold 700 shares of Parra Corporation common stock at $55 per share.
10 Purchased 300 shares, $70 par value common stock of Younker Corporation at $78 per share.
26 Received a cash dividend of $1.15 per share on Robison Corporation common stock.
Feb. 2 Received cash dividends of $0.40 per share on Vega Corporation preferred stock.
10 Sold all 800 shares of Vega Corporation preferred stock at $26 per share.
July 1 Received a cash dividend of $1.00 per share on Robison Corporation common stock.
Sept. 1 Purchased an additional 800 shares of the $70 par value common stock of Younker Corporation at $75 per share.
Dec. 15 Received a cash dividend of $1.50 per share on Younker Corporation common stock.
At December 31, 2015, the fair values of the securities were:
Robison Corporation common stock ...... $48 per share
Younker Corporation common stock ..... $72 per share

Instructions
(a) Prepare journal entries to record the transactions.
(b) Post to the investment accounts. (Use T-accounts.)
(c) Prepare the adjusting entry at December 31, 2015, to report the portfolio at fair value.
(d) Show the balance sheet presentation at December 31, 2015, for the investment-related accounts.



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  • CreatedJanuary 30, 2014
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