Question :
180.Barzetti had no investments prior to the current year. It : 1258227
180.Barzetti had no investments prior to the current year. It had the following transactions involving available-for-sale and held-to-maturity securities during the year. The stock purchases are considered short-term available-for-sale securities. Prepare Barzetti’s journal entries to record the transactions and events associated with the investment purchases.
Apr. 18Purchased 5,000 shares of Lacy Co. stock at $26.50 per share plus a $350 brokerage fee.
May 01Purchased $200,000 of Butcher’s 7%, two-year bonds payable at par value. Interest payments are paid semiannually on November 1 and May 1. It is the company’s intent to hold the bonds until maturity.
Jun. 10Purchased 4,000 shares of Sub Co. stock at $48.25 plus a $325 brokerage fee.
Nov. 01Received a check for the first semiannual interest payment on the Butcher’s bonds.
Nov. 15Received a $0.65 per share cash dividend on the Lacy Co. shares.
Nov. 30Sold 2,000 shares of Lacy Co. stock at $29 less a $300 brokerage fee.
Dec. 15Received a $1.10 per share cash dividend on the Sub Co. shares.
Dec. 20Received a $.075 per share cash dividend on the remaining Lacy Co. shares.
Dec. 31Prepare an adjusting entry to record the fair value adjustment on the available-for-sale securities. At December 31, the Lacy Co. stock has a fair value of $28 per share, and the Sub Co. stock has a fair value of $49.50 per share.
181.Weston Company had the following long-term available-for-sale securities in its portfolio at December 31, Year 1. Weston had several long-term investment transactions during the next year. After analyzing the effects of each transaction, (1) determine the amount Weston should report on its December 31, Year 1 balance sheet for its long-term investments in available-for-sale securities, (2) determine the amount Weston should report on its December 31, Year 2 balance sheet for its long-term investments in available-for-sale securities, (3) prepare the necessary adjusting entry to record the fair value adjustment at December 31, Year 2.
Available-for-Sale Securities (LT)CostFair Value
40,000 shares of Beach common stock$497,500$488,900
15,000 shares of Danfield common stock410,200412,600
18,000 shares of Cardinal common stock399,600382,500
Jan. 22Sold 9,000 shares of Cardinal common stock for $203,000 less a brokerage fee of $850.
Mar. 17Purchased 30,000 shares of Apex common stock for $995,000 plus a brokerage fee of $2,500. The shares represent a 30% ownership in Apex.
Jun. 10Purchased 108,000 shares of Desert Springs common stock for $1,525,000 plus a brokerage fee of $4,200. The shares represent a 54% ownership in Desert Springs.
Nov. 01Purchased 12,000 shares of Cliff common stock for $223,500 plus a brokerage fee of $450. The shares represent a 10% ownership.
Dec. 31At December 31, Year 2, the fair values of its investments are: Beach, $502,500; Danfield, $411,800; Cardinal, $203,100; Apex, $1,113,250; Desert Springs, $1,576,000; Cliff, $224,750.
182.On January 2, Froxel Company purchased 10,000 shares of Sandia Corp. common stock at $19 per share plus a $3,000 commission. This represents 30% of Sandia Corp.’s outstanding stock. On August 6, Sandia Corp. declared and paid cash dividends of $1.75 per share, and on December 31 it reported net income of $150,000. Prepare the necessary entries for Froxel to account for these transactions and events.
