Question

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


Troyer enters into the following long- term investment transactions during year 2013.
Jan. 13 Sold 2,125 shares of Company S stock for $72,250 less a brokerage fee of $1,195.
Mar. 24 Purchased 15,500 shares of Company U common stock for $ 282,875 plus a brokerage fee of $ 1,980. The shares represent a 62% ownership interest in Company U.
Apr. 5 Purchased 42,500 shares of Company V common stock for $ 133,875 plus a brokerage fee of $ 1,125. The shares represent a 10% ownership in Company V.
Sept. 2 Sold 11,000 shares of Company T common stock for $ 156,750 less a brokerage fee of $2,700.
Sept. 27 Purchased 2,500 shares of Company W common stock for $ 50,500 plus a brokerage fee of $ 1,050. The shares represent a 25% ownership interest in Company W.
Oct. 30 Purchased 5,000 shares of Company X common stock for $ 48,750 plus a brokerage fee of $ 1,170. The shares represent a 13% ownership interest in Company X.
The fair values of its investments at December 31, 2013, are: R, $ 568,125; S, $ 210,375; U, $ 272,800; V, $ 134,938; W, $ 54,689; and X, $ 45,625.

Required
1. Determine the amount Troyer 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 of 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 Troyer report on its December 31, 2013, incomestatement?


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  • CreatedNovember 26, 2013
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