At the end of 2012, Terry Company prepared the following schedule of investments in available-for-sale securities (common
Question:
At the end of 2012, Terry Company prepared the following schedule of investments in available-for-sale securities (common stock):
During 2013, the following transactions occurred:
June 8 Purchased Oscar Company common stock for $50,000.
Oct. 11 Sold all of the Morgan Company securities for $35,400.
Dec. 31 Received dividends of $900 on the Nance Company and Oscar Company securities, and the following year-end total market values were available: Nance Company common stock, $43,900; Oscar Company common stock, $49,600.
Required:
1. Prepare journal entries to record the preceding information.
2. Show how the preceding items are reported on Terry's December 31, 2013, balance sheet. Assume all investments are noncurrent.
3. Next Level If Terry uses IFRS, how would the accounting for investments be different from U.S. GAAP?
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...
Step by Step Answer:
Intermediate Accounting Reporting and Analysis
ISBN: 978-1111822361
1st edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach