On December 31, 2010, Ramey Associates owned the following securities, held as a long-term investment. The securities
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On December 31, 2010, Ramey Associates owned the following securities, held as a long-term investment. The securities are not held for influence or control of the investee.
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On December 31, 2010, the total fair value of the securities was equal to its cost. In 2011, the following transactions occurred.July 1 Received $1 per share semiannual cash dividend on Pine Co. common stock.Aug. 1 Received $0.50 per share cash dividend on Hurst Co. common stock.Sept. 1 Sold 1,500 shares of Pine Co. common stock for cash at $8 per share, less brokerage fees of $300.Oct. 1 Sold 800 shares of Hurst Co. common stock for cash at $33 per share, less brokerage fees of $500.Nov. 1 Received $1 per share cash dividend on Scott Co. common stock.Dec. 15 Received $0.50 per share cash dividend on Hurst Co. common stock.31 Received $1 per share semiannual cash dividend on Pine Co. common stock.At December 31, the fair values per share of the common stocks were: Hurst Co. $32, Pine Co. $8, and Scott Co. $18.Instructions(a) Journalize the 2011 transactions and post to the account Stock Investments. (Use the T-account form.)(b) Prepare the adjusting entry at December 31, 2011, to show the securities at fair value. The stock should be classified as available-for-sale securities.(c) Show the balance sheet presentation of the investments at December 31, 2011. At this date, Ramey Associates has common stock $1,500,000 and retained earnings$1,000,000.
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Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso