accounting questions

Apr 4th, 2015
FratBro23
Category:
Accounting
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.

Instructions

(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.
(997)
School: University of Virginia
PREMIUM TUTOR

Studypool has helped 1,244,100 students

8 Reviews


Summary
Quality
Communication
On Time
Value
ddg82
Dec 10th, 2016
" Thanks, good work "
tinytim47
Nov 27th, 2016
" Wow this is really good.... didn't expect it. Sweet!!!! "
kenmwao2
Nov 25th, 2016
" Solid work, thanks. "
jestin7
Nov 18th, 2016
" This tutor is great! "
lilmoe415
Nov 4th, 2016
" Thank you, Thank you, for top quality work, this is your guy!! "
dontuwannaknow
Oct 13th, 2016
" Excellent work as always thanks so much "
thargrow
Oct 4th, 2016
" Very Satisfied. "
SjSurvivor143
Sep 29th, 2016
" Thanks for the help. "
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1823 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