Question 1on january 1 2009 heitzman company purchased the

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Reference no: EM13377629

Question 1

On January 1, 2009, Heitzman Company purchased the following shares as a long-term investment in available-for-sale securities:
Corporation Shares Percent Outstanding Cost per Share
Maars 10,000 common (no par) 5% $25
Nassif 2,000 preferred (par $10) 2% $50
The market value of the stocks subsequently were as follows:
- Dec. 31, 2009 Dec.31, 2010

Maars Corporation common stock $24.00 $27.50

Nassif Corporation preferred stock $51.00 $50.50

Calculate the balance in the account, "Allowance to Adjust Long-term Investments to Market," on A. December 31, 2009 and B. December 31, 2010.

Question 2

Survivor Company was formed on January 1, 2008 by selling and issuing 20,000 shares of common stock at $15 per share. On December 1, 2009, the company declared a cash dividend of $10,000 which will be paid in cash on January 15, 2010. The annual accounting period ends December 31. A. Give the journal entry to record the sale and issuance of the common stock on January 1, 2008, for each of the following independent assumptions: The common stock has a par value of $10 per share. The common stock was no par with a stated value of $5 per share. The common stock was no par and no stated value.

B. Give the journal entry to record the dividend declaration on December 1, 2009.

C. Show the journal entry to record payment of the dividend on January 15, 2010.

Reference no: EM13377629

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