Reference no: EM132503211
On December 31, 2016, Ogallala Associates owned the following securities whose total fair value was equal to their cost. The securities were held as a long-term investment and not for influence or control of the investee.
Ordinary Shares Shares Cost Cost /share
Carlene Co. 2,000 £ 60,000 £ 30
Riverdale Co. 5,000 45,000 9
Raczynski Co. 1,500 30,000 20
135,000
In 2017, the following transactions occurred.
Aug. 1 Received £0.70 per share cash dividend on Carlene Co. ordinary shares.
Sept. 1 Sold 2,000 ordinary shares of Riverdale Co. for cash at £8 per share.
Oct. 1 Sold 725 ordinary shares of Carlene Co. for cash at £33 per share.
Nov. 1 Received £1 per share cash dividend on Raczynski Co. ordinary shares.
Dec. 15 Received £0.70 per share cash dividend on Carlene Co. ordinary shares.
31 Received £1 per share annual cash dividend on Riverdale Co. ordinary shares.
At December 31, 2017, fair values per share of the ordinary shares were Carlene Co. £32, Riverdale Co. £8, and Raczynski Co. £18.
Instructions:
Question a. Journalize 2017 transactions. Then, post only to the account Share lnvestments. (T-account below).
Question b. Record the required adjusting entry at December 31, 2017, to show the securities on-hand at fair value.
Question c. Show the statement of financial position presentation of investments and equity at December 31, 2017. At this date, Ogallala Associates has share capital-ordinary £1,500,000 and retained earnings £1,100,000.
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