Journalize the entries to record the preceding transactions

Assignment Help Accounting Basics

Reference no: EM131971904

Problem

Roman products, Inc. is a wholesaler of men hair products. the company began operations on Jan. 1, 2010. the following transactions relate to securities acquired by roman products inc. which has a fiscal year ending in Dec.31 2010.

Year 2010

jan.3 purchased 3000 shares of whalen inc. as an available for sale investment at $46 per share including the brokerage commission

july 6 split whalen inc. stock 2 for 1 and received the regular cash dividend of $0.60 per share on the whalen inc. stock after the split.

Oct. 14 sold 900 shares of whalen inc stock at $25 per share , less a brokerage commission of $50.

Dec. 9 Received the regular cash dividend of $0.60 per share .

Dec. 31 Whalen inc. is classified as an available for sale investment and is adjusted to fair value of $21 per share. Use the Valuation allowance for available for sale investment account in making the adjustment.

Year 2011

Jan 5 Purchased an influential interest in Tasmania co. for $620,000 by purchasing 60,000 shares directly from the estate of the founder of Tasmania . there are 150,000 share of Tasmania Co. stock outstanding .

July 8. received the regular cash divided of $0.70 per share on whalen inc. stock.

Dec.8. received the regular cash dividend of $0.70 per share plus an extra dividend of $0.15 per share on whalen inc. stock.

31 received $18,000 of cash dividends on Tasmania Co. stock Tasmania Co. reported net income of $74,000 in 2011. Roman products uses the equity method of accounting for its investment in Tasmania Co.

31. Whalen Inc. is classified as an available for sale investment and is adjusted to fair value of $26 per share. use the valuation allowance for available for sale investments account in making the adjustment.

Instructions:

1. Journalize the entries to record the preceding transactions.

2. Prepare the investment-related asset and stockholders' equity balance sheet disclosures for roman products inc. on December 31, 2011 assuming the retained earnings balance on December 31, 2011 is $455,000.

Reference no: EM131971904

Questions Cloud

Marginal revenue product of second unit of labor : If the firm can sell 12 units of its product at $1.00 per unit and and 21 units at $0.80 per unit, what is the marginal revenue product of the second unit of la

What is your high target stock price over the next year : If you look at stock prices over any year, you will find a high and low stock price for the year.

What is the profit from the position : You expect the price of GE to not change very much in the next month, so you go short on (sell) a straddle (a put and a call at the same strike).

Calculate the current annual rate of return on instrument : Calculate the current annual rate of return on this instrument and compare it to the annual rate of return you were expecting.

Journalize the entries to record the preceding transactions : Journalize the entries to record the preceding transactions. Prepare the investment-related asset and stockholders' equity balance sheet disclosures for roman.

Explain the concept of the fama-french model : The expected premium on small stocks relative to large stocks is 6%, and the expected risk premium on low book-to-market stocks relative to high book-to-market.

Example of absolute and comparative advantage : Give an example of absolute and comparative advantage. Explain how this is linked to the economic belief that all countries can benefit from trade.

The price of put option necessary to guarantee sales price : Over the past five years, the price of land in the area has increased 6 percent per year, with an annual standard deviation of 32 percent.

What is the value of this company output : The market value of the dishwasher machines in 1998 was $200 per unit. What is the value of this company's output that will be included in the 1998 GDP?

User Account

All Pages