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. 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.

Chapter 16, Problem Set A #3

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.

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.

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... 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... 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...