Question : 123. Skyline, Inc. purchased a portfolio of trading securities during 2012. : 1239332

 

123. Skyline, Inc. purchased a portfolio of trading securities during 2012.  The cost and fair value of this portfolio on December 31, 2012, was as follows:

Name

Number of Shares

Total Cost

Total Fair Value

Alcon, Inc.

1,200

$16,000

$15,000

Easton Company

700

23,000

21,500

Panther Company

300

9,000

9,200

Total

 

$48,000

$45,700

 

 

 

 

Required:Provide the journal entry to record the adjustment of the trading security portfolio to fair value on December 31, 2012.Where will the information from the journal entry be reported on the financial statements? 

 

 

 

 

 

124. Skyline, Inc. purchased a portfolio of available-for-sale securities during 2012.  The cost and fair value of this portfolio on December 31, 2012, was as follows:

Name

Number of Shares

Total Cost

Total Fair Value

Blackstone, Inc.

400

$4,000

$5,200

Flagler Company

200

3,000

2,700

Patternson Corporation

600

7,500

9,800

Total

 

$14,500

$17,700

 

 

 

 

Required:Provide the journal entry to record the adjustment of the available-for-sale security portfolio to fair value on December 31, 2012.Where will the information from the journal entry be reported on the financial statements? 

 

 

 

 

 

125. The income statement for Hudson Company reported net income of $345,000 for the year ended December 31, 2012 before considering the following: During the year the company purchased trading securities. At year end, the fair value of the investment portfolio was $23,000 less than cost.  The balance of retained earnings was $823,000 on December 31, 2011.   Hudson Company paid $43,000 in cash dividends in 2012.  Calculate the balance of retained earnings on December 31, 2012. 

 

 

 

 

 

126. The income statement for Dodson Corporation reported net income of $22,400 for the year ended December 31, 2012 before considering the following: During the year the company purchased available-for-sale securities. At year end, the fair value of the investment portfolio was $2,100 more than cost.  The balance of retained earnings was $83,000 on December 31, 2011.  Dobson Corporation paid $9,000 in cash dividends in 2012.  Calculate the balance of retained earnings on December 31, 2012. 

 

 

 

 

 

127. During 2012, its first year of operations, Makala Company purchased two available-for-sale investments as follows:

Security

Shares Purchased

Cost

Oceanna Company

700

$29,000

Rockledge, Inc.

1,900

41,000

 

 

 

Assume that as of December 31, 2012, the Oceanna Company stock had a market value of $49 per share and Rockledge, Inc. stock had a market value of $20 per share.  Makala had 10,000 shares of no par stock outstanding that was issued for $150,000.  For the year ending December 31, 2012, Makala had a net income of $105,000.  No dividends were paid.Required:

(1)

Prepare the Current Assets section of the balance sheet presentation for the available-for sale securities as of December 31, 2012.

(2)

Prepare the Stockholders’ Equity section of the balance sheet as of December 31, 2012.

 

 

 

 

 

 

 

 

 

 

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