Reference no: EM132035386
Questions -
Q1. On August 1, Shaw Company buys 1,000 shares of Estrada common stock for $28,260 cash. On December 1, Shaw sells the stock investments for $34,670 in cash.
Journalize the purchase and sale of the common stock.
Q2. Godfrey Corporation holds, as a long-term investment available-for-sale securities costing $65,900. At December 31, 2014, the fair value of the securities is $59,492.
Prepare the adjusting entry to record the securities at fair value.
Q3. Kruger Corporation has the following long-term investments: (1) Common stock of Eidman Co. (10% ownership) held as available-for-sale securities, cost $148,360, fair value $155,520. (2) Common stock of Pickerill Inc. (30% ownership), cost $234,590, equity $298,630.
Prepare the investments section of the balance sheet.
Q4. Flynn Company purchased 70 Rinehart Company 11%, 10-year, $1,900 bonds on January 1, 2014, for $133,000. The bonds pay interest semiannually on July 1 and January 1. On January 1, 2015, after receipt of interest, Flynn Company sold 42 of the bonds for $73,150.
Prepare the journal entries to record the transactions described above.
Q5. On January 1, Zabel Corporation purchased a 25% equity in Helbert Corporation for $185,500. At December 31, Helbert declared and paid a $61,100 cash dividend and reported net income of $211,300.
Journalize the transactions.
Q6. At December 31, 2014, the trading securities for Storrer, Inc. are as follows.
|
Security
|
Cost
|
Fair Value
|
|
A
|
$17,700
|
$15,500
|
|
B
|
12,100
|
14,300
|
|
C
|
23,300
|
18,600
|
|
$53,100
|
$48,400
|
Prepare the adjusting entry at December 31, 2014, to report the securities at fair value.
Q7. Heidebrecht Design acquired 30% of the outstanding common stock of Quayle Company on January 1, 2014, by paying $622,500 for the 41,500 shares. Quayle declared and paid $0.60 per share cash dividends on March 15, June 15, September 15, and December 15, 2014. Quayle reported net income of $340,100 for the year. At December 31, 2014, the market price of Quayle common stock was $26 per share.
Prepare the journal entries for Heidebrecht Design for 2014 assuming Heidebrecht Design cannot exercise significant influence over Quayle. (Use the cost method and assume that Quayle common stock should be classified as a trading security.)