On December 31, 2013, Ogallala Associates owned the following securities, held as a long-term investment. The securities

Question:

On December 31, 2013, Ogallala Associates owned the following securities, held as a long-term investment. The securities are not held for influence or control of the investee.

Common Stock Carlene Co. Riverdale Co. Raczynski Co. Cost Shares 2,000 5,000 1,500 $60,000 30,000

On December 31, 2013, the total fair value of the securities was equal to its cost. In 2014, the following transactions occurred.
July 1 Received $1 per share semiannual cash dividend on Riverdale Co. common stock.
Aug. 1 Received $0.50 per share cash dividend on Carlene Co. common stock.
Sept. 1 Sold 1,500 shares of Riverdale Co. common stock for cash at $8 per share, less brokerage fees of $300.
Oct. 1 Sold 800 shares of Carlene Co. common stock for cash at $33 per share, less brokerage fees of $500.
Nov. 1 Received $1 per share cash dividend on Raczynski Co. common stock.
Dec. 15 Received $0.50 per share cash dividend on Carlene Co. common stock.
31 Received $1 per share semiannual cash dividend on Riverdale Co. common stock.
At December 31, the fair values per share of the common stocks were Carlene Co. $32, Riverdale Co. $8, and Raczynski Co. $18.
Instructions
(a) Journalize the 2014 transactions and post to the account Stock Investments. (Use the T-account form.)
(b) Prepare the adjusting entry at December 31, 2014, to show the securities at fair value. The stock should be classified as non-trading securities.
(c) Show the balance sheet presentation of the investments at December 31, 2014. At this date, Ogallala 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...

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Question Posted: Feb 12, 2018 10:27 AM

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On December 31, 2013, Ogallala Associates owned the following securities, held as a long-term investment. The securities

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Common Stock Carlene Co. Riverdale Co. Raczynski Co. Cost Shares 2,000 5,000 1,500 $60,000 30,000

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a 2015 July 1 Cash 5000 X 1 5000 Dividend Revenue 5000 Aug 1 Cash 2000 X 50 1000 Dividend Revenue 10...View the full answer

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