Prepare adjusting entry to record necessary value adjustment

Assignment Help Financial Management
Reference no: EM13339131

While reviewing the March 31, 2012, balance sheet of Business Solutions, Santana Rey notes that the business has built a large cash balance of $68,057. Its most recent bank money market statement shows that the funds are earning an annualized return of 0.75%, so Rey decided to make several investments with the desire to earn a higher return on the idle cash balance. Accordingly, in April, 2012, Business Solutions makes the following investments in trading solutions:

April 16 - Purchase 400 shares of Johnson & Johnson at $50 per share plus $300 commission.
April 30 - Purchase 200 shares of Starbucks Corporation at $22 per share plus $250 commission.

Questions:

1. Prepare journal entries to record the April purchases of trading securities by Business Solutions.

2. On June 30, 2012, the per share market price (fair value) of the Johnson & Johnson shares is $55 and the Starbucks shares is $19. Prepare the adjusting entry to record any necessary fair value adjustment to its portfolio of trading securities.

Reference no: EM13339131

Questions Cloud

Compute the debt ratio and equity ratio : Compute the gross margin ratio and net profit margin ratio, compare the current ratio and acid-test ratio and compute the debt ratio and equity ratio.
What is the pressure change in water going from a pipe : What is the pressure change in water going from a 3.0- cm-diameter pipe to a 2.1- cm-diameter pipe if the velocity in the smaller pipe is 5.0 m/s
Environment-based theories of coping : Read Aldwin's presentation of person-based and environment-based theories of coping
What is the highest that one can make a solid concrete tower : Assuming wind forces can be neglected, what is the highest that one can make a solid concrete tower of uniform cross-section (Take the density of concrete to be 2,400 kg/m^3)
Prepare adjusting entry to record necessary value adjustment : Prepare journal entries to record the April purchases of trading securities by Business Solutions and prepare the adjusting entry to record any necessary fair value adjustment to its portfolio of trading securities.
Find the initial and final values of vapor pressure : An air mass has a temperature of 68F at 970hPa with a mixing ratio of 5 g kg-1. Without any condensation or mixing the air mass now has a temperature of 50F and a pressure of 750hPa.
Determine what is the intensity of the light at the earth : The North Star (Polaris) is a distance 431 ly away and radiates energy in the form of light at a rate of 8.6 x 1029 W. What is the intensity of this light at the Earth
Find the magnitude of the frictional force of the floor : A person with mass of 70kg is climbing a ladder with a length of 6 m and the ladder has a mass of 20kg that leans against a smooth, What is the magnitude of the frictional force of the floor
Evaluate the proposals for expansion : Prepare the journal entry to reflect the initial $86,000 investment and evaluate the three proposals for expansion, providing the pros and cons of each option

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd