The following securities are in Pascual Companys portfolio of long-term available for- sale securities at December 31, 2010. Cost 1,000 shares of Abel Corporation common stock ... $52,000 1,400 share of Frey Corporation stock .......... 84,000 1,200 shares of Weiss Corporation preferred stock ... 33,600 On December 31, 2010, the total cost of the portfolio equaled total fair value. Pascual

Chapter 16, Problem Set A #5

The following securities are in Pascual Company’s portfolio of long-term available for- sale securities at December 31, 2010.

Cost

1,000 shares of Abel Corporation common stock ... $52,000

1,400 share of Frey Corporation stock .......... 84,000

1,200 shares of Weiss Corporation preferred stock ... 33,600

On December 31, 2010, the total cost of the portfolio equaled total fair value. Pascual had the following transactions related to the securities during 2011.

Jan. 20 Sold 1,000 shares of Abel Corporation common stock at $55 per share less brokerage fees of $600.

28 Purchased 400 shares of $70 par value common stock of Rosen Corporation at $78 per share, plus brokerage fees of $480.

30 Received a cash dividend of $1.15 per share on Frey Corp. common stock.

Feb. 8 Received cash dividends of $0.40 per share on Weiss Corp. preferred stock.

18 Sold all 1,200 shares of Weiss Corp. preferred stock at $27 per share less brokerage fees of $360.

July 30 Received a cash dividend of $1.00 per share on Frey Corp. common stock.

Sept. 6 Purchased an additional 900 shares of $10 par value common stock of Rosen

Corporation at $82 per share, plus brokerage fees of $1,200.

Dec. 1 Received a cash dividend of $1.50 per share on Rosen Corporation common stock.

At December 31, 2011, the fair values of the securities were:

Frey Corporation common stock $64 per share

Rosen Corporation common stock $72 per share

Pascual Company uses separate account titles for each investment, such as “Investment in Frey Corporation Common Stock.”

Instructions

(a) Prepare journal entries to record the transactions.

(b) Post to the investment accounts. (Use T accounts.)

(d) Show the balance sheet presentation at December 31, 2011, for the investment-related accounts.

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...