Question

During 2019, its first year of operations, A Company purchased 4 available-for-sale investments as follows:
Security Shares Purchased Total Cost
Co 1 3500 $67000
Co 2 2215   $72620
Co 3 1000 $21550
Co 4 2250    $58000

Assume that as of November 30, 2019, the Co 1 stock had a market value of $23 per share, Co 2. stock had a market value of $23 per share, Co 3 stock had a market value of $38 per share and Co 4 stock had a market value of $18 per share. A Company had $36,550 shares of no par stock outstanding that was issued for $900,000. For the year ending November 30, 2019. A Company had a net income of $275,000 No dividends were paid.

1) Prepare the Stockholders’ Equity section of the balance sheet as of November 30, 2019

2) Prepare the Current Assets section of the balance sheet presentation for the available-for-sale securities as of November 30, 2020.

Answer 1

Required 1

A Company
Balance Sheet (Partial)
As at Nov 30, 2019
Particulars	Amount ( in $ )
EQUITY AND LIABILITIES
Equity
Common Stock	900,000
Retained Earnings:
Profit & Loss Account	275,000
Other Comprehensive Income: Unrealised Loss	(9,225)
Total Equity	1,175,000
Calculation of Unrealised Gain or Loss Company 1 Company 2 Company 3 Company 4 Number of Shares              3,500                2,215              1,000                2,250 Market Value per Share                    23                      23                    38                      18 Market Value (no of shares x share value)            80,500              50,945            38,000              40,500 Less: Cost          (67,000)           (72,620)          (21,550)           (58,000) Unrealised Gain / Loss            13,500           (21,675)            16,450           (17,500) Total Unrealised Gain/Loss =            (9,225)

Required 2

A Company
Balance Sheet (Partial)
As at Nov 30, 2020
Particulars	Amount ( in $ )
Current Assets
Investments available for Sale
Company 1	67,000
Company 2	72,620
Company 3	21,550
Company 4	58,000
Total Current Investments	219,170