accounting questions

Apr 4th, 2015
Price: $5 USD

Question description

Problem #4 – Stock and Debt Investments

in  In January 2011, the management of Acme Company concludes that it has sufficient

cash to permit some short-term investments in debt and stock securities. During the year, the

following transactions occurred.

Feb. 1   Purchased 600 shares of Hershey common stock for $31,800, plus brokerage fees of $600.

Mar. 1   Purchased 800 shares of Praters common stock for $20,000, plus brokerage fees of $400.

Apr. 1   Purchased 50 $1,000, 7% Ralls bonds for $50,000, plus $1,000 brokerage fees. Interest is payable semiannually on April 1 and October 1.

July 1   Received a cash dividend of $0.60 per share on the Hershey common stock.

Aug. 1   Sold 200 shares of Hershey common stock at $58 per share less brokerage fees of $200.

Sept. 1   Received a $1 per share cash dividend on the Praters common stock.

Oct. 1   Received the semiannual interest on the Ralls bonds.

Oct. 1   Sold the Ralls bonds for $50,000 less $1,000 brokerage fees.

At December 31, the fair value of the Hershey common stock was $55 per share. The fair value of

the Praters common stock was $24 per share.


(a) Journalize the transactions shown on page 599 and post to the accounts Debt Investments and Stock Investments. (Use the T-account form.)

(b) Prepare the adjusting entry at December 31, 2011, to report the investment securities at fair value.  All securities are considered to be trading securities.

(c) Show the balance sheet presentation of investment securities at December 31, 2011.

(d) Identify the income statement accounts and give the statement classification of each account.

Tutor Answer

(Top Tutor) Daniel C.
School: University of Virginia

Studypool has helped 1,244,100 students

Review from our student for this Answer

Apr 6th, 2015
"awesome work thanks"
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1827 tutors are online

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors