Here is Kline Company’s portfolio of long-term available-for-sale securities at

Here is Kline Company’s portfolio of long-term available-for-sale securities at

December 31, 2013:

Cost

1,400 shares of Tabares Inc. common stock......... $73,500

1,200 shares of Munoz Corporation common stock........84,000

800 shares of H. Hogan Corporation preferred stock.....33,600

On December 31, the total cost of the portfolio equaled the total fair value. Kline had the following transactions related to the securities during 2014.

Jan. 20 Sold 1,400 shares of Tabares Inc. common stock at $55 per share.

28 Purchased 400 shares of $10 par value common stock of M. Powell Corporation at $78 per share.

30 Received a cash dividend of $1.25 per share on Munoz Corporation common stock.

Feb.8 Received cash dividends of $0.40 per share on H. Hogan Corporation preferred stock.

18 Sold all 800 shares of H. Hogan preferred stock at $35 per share.

July 30 Received a cash dividend of $1.10 per share on Munoz Corporation common stock.

Sept. 6 Purchased an additional 600 shares of the $10 par value common stock of

M. Powell Corporation at $82 per share.

Dec. 1 Received a cash dividend of $1.50 per share on M. Powell Corporation

common stock.

At December 31, 2014, the fair values of the securities were:

Munoz Corporation common stock..........$65 per share

M. Powell Corporation common stock..........$77 per share

Kline uses separate account titles for each investment, such as Investment in Munoz Corporation Common Stock.

Instructions

(a) Prepare journal entries to record the transactions.

(b) Post to the investment accounts. (Use separate T-accounts for each investment.)

(c) Prepare the adjusting entry at December 31, 2014, to report the portfolio at fair value.

(d) Show the balance sheet presentation at December 31, 2014.

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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